So as an example, let's bring in the value of all these variables for

company X in the year 2015.

So, I've filled that in this column.

One not at the bottom is sometimes it's hard to get data to calculate SGAI,

AQI, or DEPI.

So if you can't do that, Beneish has found that you can just set them equal to

one and the model would still work pretty well.

So now that we have the variables, we can take the weight times the variable, so

the intercept will just carry over.

But then for DSRI, we would take the weight on that times the value of DSRI for

this company in 2015.

To get the product of the weight and the variable, we add up this last column and

we get an M-Score of negative 0.442.

And what Beneish has found, is that an M-Score that's greater than -1.78

is a red flag that indicates a potential manipulator, a potential fraud firm.