Overview
Beneish M-Score screens for potential earnings manipulation risk.
Formula
M-Score = weighted combination of accrual, margin, leverage, and sales-quality indexes
How to Interpret
High Value
A higher risk score can indicate weaker earnings-quality signals.
Low Value
A lower risk score can indicate cleaner accounting signals.
Where It Is Used
Interpreting M-Score with company-specific distribution ranges is usually more stable than relying only on sector average.