indiTraders - Forum for the Active Indian Trader  

Go Back   indiTraders - Forum for the Active Indian Trader > Markets > Stocks > Fundamentals

Fundamentals Section for Fundamental Analysis

Reply
 
Bookmark and Share LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 20-04-2016, 12:41 PM
nTP's Avatar
nTP nTP is offline
Flash Crash
 
Join Date: Dec 2013
Location: kolkata
Posts: 2,067
Thanks: 7,873
Thanked 2,274 Times in 1,359 Posts
nTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud ofnTP has much to be proud of
Default Calculation of the M-Score

Calculation of the M-Score

1. Days’ Sales in Receivables Index (DSRI)

Manipulation 1

2. Gross Margin Index (GMI)

Manipulation 2

3. Asset Quality Index (AQI)

Manipulation 3

4. Sales Growth Index (SGI)

Manipulation 4

5. Depreciation Index (DEPI)

Manipulation 5

6. SGA Index (SGAI)

Manipulation 6

7. Leverage Index (LVGI)

Manipulation 7

8. Accruals to Total Assets (TATA)

Manipulation 8
Interpretation and Caveat

The M-Score is calculated by adding the variables based on this formula:

M = -4.84 + 0.92*DSRI + 0.528*GMI + 0.404*AQI + 0.892*SGI + 0.115*DEPI – 0.172*SGAI + 4.679*TATA – 0.327*LVGI

If the M-Score is more than -1.78, there is a strong likelihood of a firm being a manipulator. Users of the M-Score have to be familiar with its limitations however, lest too much emphasis is placed on it. The score correctly identifies 76% of manipulators, while incorrectly identifying 17.5% of non-manipulators. In other words, it is not a certainty. In addition, the test and coefficients were run based on U.S data. It is quite possible that different markets will have different figures. Lastly, as with all back tests, there is no guarantee that the figures are accurate today even though they may have been accurate in the past.

As part of our mission to make quality investment education affordable and accessible for everyone, we are very excited to announce our 2-part investment workshop held on 7th May and conveniently located at Park Mall!

For more information, check out our Courses page! We look forward to seeing you!

ref: http://value-edge.com/2016/04/20/det...neish-m-score/
__________________
thx
nTuple

Disclaimer: I am not a Research Analyst and not registered with any regulating authority. All posts are for educational purpose only.

Consider us a dumb -dumble guy in this analysis, any type of real time example will be quick-learn approach.
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following User Says Thank You to nTP For This Useful Post:
Reply

indiTraders - Forum for the Active Indian Trader > Markets > Stocks > Fundamentals


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are On



All times are GMT +5.5. The time now is 05:37 PM.


vBulletin Copyright by vBulletin

Content Relevant URLs by vBSEO 3.3.2