| Created by Professor Messod Beneish, the M-Score is a mathematical model that uses eight financial ratios to identify whether a company has managed/manipulated its earnings. An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator. Enron Corporation was correctly identified as an earnings manipulator by students from Cornell University using M-Score. Noticeably, Wall Street financial analysts were still recommending buying Enron shares then. |
