I don't agree with the Beneish M-Score for company X?

We calculate all the M-Scores ourselves based on the Reuters data-set and the original research paper by Messod Daniel Beneish. You can use the popup to see the details of the calculation. Do feel free to contact us via the Green Support Messenger if you disagree with the calculation.

How should you interpret the score?

Created by Professor Beneish, the M-Score is a mathematical model that uses eight financial ratios to identify whether a company has managed / manipulated its earnings. The variables are constructed from the company's financial statements and create a score to describe the degree to which the earnings have been manipulated. In many ways it is similar to the Altman Z-Score, but it is focused on detecting earnings manipulation rather than bankruptcy.

The Beneish M-score generally works well as a risk indicator but no statistical indicator will ever get it right 100% of the time. In his out of sample tests, Beneish found that he could correctly identify 76% of manipulators, whilst only incorrectly identifying 17.5% of non-manipulators. That's why we provide the popups for the "red flags" so users can look into specific company factors that might lead someone to draw a different conclusion.

We discuss the Beneish score in more detail here and there's an interesting forum discussion about the interpretation of the M-Score here.