Forensic Scores
What is the Beneish M-score?
A screen for manipulated earnings. It looks for the patterns that tend to precede restatements: receivables growing faster than sales, fading margins, softer asset quality, and profits that outrun cash.
How it is calculated
A weighted sum of eight year-over-year indexes: receivables to sales, gross margin, asset quality, sales growth, depreciation rate, SG&A to sales, leverage, and accruals to assets, less 4.84.
How to read it
Above -1.78 suggests earnings may be manipulated and deserves a close read of the accounting flags; most companies score well below that line. Treat it as a prompt to investigate, never as a verdict.
Keep in mind
Fast, honest growth pushes the score up through the sales growth index.
Where the numbers come from
Scrutar computes the Beneish M-score from the figures each company reports to the SEC in its annual and quarterly filings, using the XBRL data attached to those filings.