Beneish M-Score

The Beneish M-Score is a financial tool used to detect earnings manipulation in companies. Developed by economist Messod Beneish, it uses various financial ratios derived from a company's financial statements to assess the likelihood that a company has "manipulated" its reported earnings. A lower M-Score suggests the company is likely being honest with its earnings, while a higher score indicates a greater risk of accounting irregularities. Investors and analysts often use this score as a red flag when evaluating the financial health and transparency of a company.