6.23 (p.482) Applying and Interpreting the Earnings Manipulation Model

Beneish's Earnings Manipulation Score

1998

1999

2000

Days in Receivable Index (DSRI): 0.920

Gross Margin Index (GMI): 0.528

Asset Quality Index (AQI): 0.404

Sales Growth Index (SGI): 0.892

Depreciation Index (DEPI): 0.115

Selling and Administrative Index (SAI): -0.172

Leverage Index (LVGI): -0.327

Total Accruals to Total Assets (TATA): 4.679

Constant

-4.840

-4.840

-4.840

Value of y

-4.840

-4.840

-4.840

Probability of Earnings Manipulation

0.000%

0.000%

	2000	1999	1998	1997
Accounts receivable	$ 10,396	$ 3,030	$ 2,060	$ 1,697
Current assets	30,381	7,255	5,933	4,669
Property, plant, and equipment, net	11,743	10,681	10,657	9,170
Total assets	65,503	33,381	29,350	23,422
Current liabilities	28,406	6,759	6,107	4,412
Long-term debt	8,550	7,151	7,357	6,254
Sales	$100,789	$40,112	$31,260	$20,273
Cost of goods sold	94,517	34,761	26,381	17,311
Selling and administrative expenses	3,184	3,045	2,473	1,406
Income from continuing operations	979	1,024	703	105
Cash flow from operations	4,779	1,228	1,640	501
Depreciation expense	485	565	563	48
	2000	1999	1998	1997
Accounts receivable	$ 10,396	$ 3,030	$ 2,060	$ 1,697
Current assets	30,381	7,255	5,933	4,669
Property, plant, and equipment, net	11,743	10,681	10,657	9,170
Total assets	65,503	33,381	29,350	23,422
Current liabilities	28,406	6,759	6,107	4,412
Long-term debt	8,550	7,151	7,357	6,254
Sales	$100,789	$40,112	$31,260	$20,273
Cost of goods sold	94,517	34,761	26,381	17,311
Selling and administrative expenses	3,184	3,045	2,473	1,406
Income from continuing operations	979	1,024	703	105
Cash flow from operations	4,779	1,228	1,640	501
Depreciation expense	485	565	563	48

0.000%