Beneish M-score
Combine the eight Beneish indices into the M-score, and see whether a company’s accounts show the combined pattern the model associates with earnings manipulation.
Runs entirely in your browserRuns entirely on your device — nothing you type is sent anywhere. Educational only, and not investment advice.
How to use this calculator
Each step names a control you will find on screen above.
- DSRI — receivable days index
Receivables as a share of sales this year, divided by the same ratio last year. Above 1 means customers are taking longer to pay, or sales are being booked early.
- GMI — gross margin index
Last year’s gross margin divided by this year’s. Above 1 means margins fell, which increases pressure to flatter results.
- AQI — asset quality index
The share of assets that are neither current assets nor plant — often capitalised costs — this year versus last. Above 1 can mean costs are being parked on the balance sheet.
- SGI — sales growth index
This year’s sales divided by last year’s. High growth is not manipulation, but it raises both pressure and opportunity.
- DEPI, SGAI and LVGI
The depreciation, overheads and leverage indices. A slowing depreciation rate raises DEPI; SGAI and LVGI carry negative weights in the model.
- TATA — accruals to assets
Net profit minus operating cash flow, divided by total assets. It carries by far the heaviest weight: profit not backed by cash.
Worked example: Fast growth with profit ahead of cash
A company grew sales 30%, while receivables grew much faster — its receivable days rose by 40%. Gross margin slipped, and profit exceeded operating cash flow by 6% of total assets. Its other indices are neutral at 1.
What to enter
- DSRI — receivable days index
- 1.40
- GMI — gross margin index
- 1.10
- AQI — asset quality index
- 1.00
- SGI — sales growth index
- 1.30
- DEPI, SGAI and LVGI
- 1.00 each
- TATA — accruals to assets
- 0.06
What it shows you
- M-score
- −1.51
- Threshold
- −1.78
- Accruals term
- +0.28
- Reading
- Flagged
Where this is taught
A calculator gives you a number. These explain what the number means and when it misleads you.
- Fundamental Analysis10 minThe Beneish M-score: sniffing out cooked booksA model built to flag companies likely to be manipulating their earnings. What the eight variables capture, the threshold that raises suspicion, and why it is a smoke detector, not a verdict.
- Fundamental Analysis8 minThe Montier C-score: six flags for a company cooking the booksWhere the Beneish M-score runs the numbers through a statistical model, the Montier C-score is a plain checklist — six yes-or-no red flags for aggressive accounting. Add up how many are lit, and you have a fast, transparent measure of how much to distrust the earnings.
- Fundamental Analysis13 minAccruals: the gap between profit and cash, as a numberEveryone says to compare profit with cash flow. This is how you turn that instinct into a ratio you can screen on — and one of the better-documented predictors of disappointment.
- Fundamental Analysis10 minHow the three statements connectThey are not three documents — they are one system with three views. Once you see the links, inconsistencies become obvious.