Beneish M-Score

Plain-language meaning

The Beneish M-Score is an eight-variable forensic accounting model evaluating probability of earnings manipulation.

Why it is useful

Beneish M-Score is useful as descriptive evidence when it is compared on the same definition, source, period, unit and exact listing. It is one input to research, not a verdict.

Where it appears in XMarketRadar

Search the Financial glossary for Beneish M-Score; linked XMarketRadar screens expose it only when verified inputs are available.

How it is calculated or sourced

M-Score = −4.84 + 0.920×DSRI + 0.528×GMI + 0.404×AQI + 0.892×SGI + 0.115×DEPI − 0.172×SGAI + 4.037×TATA + 0.0327×LVGI. An M-Score greater than −1.78 suggests a higher probability of earnings manipulation under the academic model.

Inputs, period and unit

Read the disclosed inputs or source, observation period, bar interval, unit, native currency and scale. A value without its source and as-of context is incomplete; unlike units must not be combined.

Worked example

Illustrative only: Company reports Day Sales in Receivables Index (DSRI) 1.45, Gross Margin Index (GMI) 1.20, Asset Quality Index (AQI) 1.15, and Total Accruals to Total Assets (TATA) 0.08. The calculated M-Score evaluates to −1.45. Since −1.45 > −1.78, it flags potential earnings manipulation risk requiring scrutiny of accruals.

What high and low mean

A higher or lower Beneish M-Score value is descriptive, not automatically good or bad. Meaning depends on the instrument, comparison period, method and related evidence.

Positive, negative and genuine zero

Positive and negative Beneish M-Score values retain the definition shown here. A genuine reported or computed zero is displayed as 0 and is not the same as missing evidence.

When it is unavailable

Unavailable (—) means Beneish M-Score is absent, unsupported, stale under the screen's rules or not computable from verified inputs. It must never be converted to zero or a neutral signal.

Limitations and common mistakes

Accounting ratios rely on reported historical financial statements and can lag off-balance-sheet arrangements, fraud concealment or rapid cash burn. Academic models calibrated for US manufacturing may misclassify modern tech, service or financial firms.

Market-specific differences

The concept is used across all supported markets, but currency, price scale, session calendar, source field and regulatory definition can differ. XMarketRadar preserves the exact exchange context.

Related terms

Use the related-term links on this page to compare Beneish M-Score with neighbouring definitions while retaining each term's distinct source, unit and limitations.

Suggested next steps

Open the related Valuation and ratios terms below, then follow the matching Help Centre task guide and inspect Beneish M-Score on an exact exchange listing. Confirm source, as-of time, units and unavailable reason before using it in research.

Educational information only; not investment advice or an order service.

This Beneish M-Score tutorial is educational and descriptive. It is not investment advice, a price prediction, a recommendation, or an instruction to buy, sell, rebalance or place an order.