Grupo de Inversiones Suramericana Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Grupo de Inversiones Suramericana for today is based on a combination of the following eight different indices:
| M | = | -4.84 | + | 0.92 * DSRI | + | 0.528 * GMI | + | 0.404 * AQI | + | 0.892 * SGI | + | 0.115 * DEPI |
| = | -4.84 | + | 0.92 * 0.8736 | + | 0.528 * 1 | + | 0.404 * 0.999 | + | 0.892 * 1.1958 | + | 0.115 * 0.9273 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9097 | + | 4.679 * 0.052729 | - | 0.327 * 0.8808 |
| = | -2.13 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was COP4,139,969 Mil.
Revenue was 13717260 + 10087246 + 7895140 + 9603704 = COP41,303,350 Mil.
Gross Profit was 13717260 + 10087246 + 7895140 + 9603704 = COP41,303,350 Mil.
Total Current Assets was COP0 Mil.
Total Assets was COP90,546,804 Mil.
Property, Plant and Equipment(Net PPE) was COP1,923,000 Mil.
Depreciation, Depletion and Amortization(DDA) was COP601,847 Mil.
Selling, General, & Admin. Expense(SGA) was COP1,972,606 Mil.
Total Current Liabilities was COP0 Mil.
Long-Term Debt & Capital Lease Obligation was COP7,807,308 Mil.
Net Income was 4909752 + 405914 + 310511 + -11118 = COP5,615,059 Mil.
Non Operating Income was 168427 + 948703 + 141764 + 202785 = COP1,461,679 Mil.
Cash Flow from Operations was 163924 + -1953513 + 529104 + 639391 = COP-621,094 Mil.
|
Total Receivables was COP3,963,151 Mil.
Revenue was 8801133 + 12503527 + 5797739 + 7439340 = COP34,541,739 Mil.
Gross Profit was 8801133 + 12503527 + 5797739 + 7439340 = COP34,541,739 Mil.
Total Current Assets was COP0 Mil.
Total Assets was COP99,417,052 Mil.
Property, Plant and Equipment(Net PPE) was COP2,013,696 Mil.
Depreciation, Depletion and Amortization(DDA) was COP571,429 Mil.
Selling, General, & Admin. Expense(SGA) was COP1,813,503 Mil.
Total Current Liabilities was COP0 Mil.
Long-Term Debt & Capital Lease Obligation was COP9,732,059 Mil.
|
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total Receivables in year t to year t-1.
A large increase in DSR could be indicative of revenue inflation.
| DSRI | = | (Receivables_t / Revenue_t) | / | (Receivables_t-1 / Revenue_t-1) |
| = | (4139969 / 41303350) | / | (3963151 / 34541739) |
| = | 0.100233 | / | 0.114735 |
| | = | 0.8736 |
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
| GMI | = | GrossMargin_t-1 | / | GrossMargin_t |
| = | (GrossProfit_t-1 / Revenue_t-1) | / | (GrossProfit_t / Revenue_t) |
| = | (34541739 / 34541739) | / | (41303350 / 41303350) |
| = | 1 | / | 1 |
| | = | 1 |
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.
| AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
| = | (1 - (0 + 1923000) / 90546804) | / | (1 - (0 + 2013696) / 99417052) |
| = | 0.978762 | / | 0.979745 |
| | = | 0.999 |
4. SGI = Sales Growth Index
Ratio of Revenue in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
| SGI | = | Sales_t | / | Sales_t-1 |
| = | Revenue_t | / | Revenue_t-1 |
| = | 41303350 | / | 34541739 |
| | = | 1.1958 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
| DEPI | = | (Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) | / | (Depreciation_t / (Depreciaton_t + PPE_t)) |
| = | (571429 / (571429 + 2013696)) | / | (601847 / (601847 + 1923000)) |
| = | 0.221045 | / | 0.23837 |
| | = | 0.9273 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
| SGAI | = | (SGA_t / Sales_t) | / | (SGA_t-1 /Sales_t-1) |
| = | (1972606 / 41303350) | / | (1813503 / 34541739) |
| = | 0.047759 | / | 0.052502 |
| | = | 0.9097 |
7. LVGI = Leverage Index
The ratio of total debt to Total Assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((7807308 + 0) / 90546804) | / | ((9732059 + 0) / 99417052) |
| = | 0.086224 | / | 0.097891 |
| | = | 0.8808 |
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
| TATA | = | (IncomefromContinuingOperations_t | - | CashFlowsfromOperations_t) | / | TotalAssets_t |
| = | (NetIncome_t - NonOperatingIncome_t | - | CashFlowsfromOperations_t) | / | TotalAssets_t |
| = | (5615059 - 1461679 | - | -621094) | / | 90546804 |
| | = | 0.052729 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Grupo de Inversiones Suramericana has a M-score of -2.13 suggests that the company is unlikely to be a manipulator.
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