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Beneish M-Score

Trading Term

The Beneish M-Score is a financial model designed to identify companies that may be manipulating reported earnings. It combines accounting variables involving receivables, margins, asset quality, depreciation, expenses, growth, leverage, and accruals.

The score does not establish that financial manipulation has occurred. Instead, it serves as a screening tool that may encourage investors to examine the company’s accounting policies and financial statements more closely.

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