OpenBB/website/content/stocks/fundamental_analysis/fraud/_index.md

usage: fraud [-h] [--export {csv,json,xlsx}]

optional arguments:
  -h, --help            show this help message
  --export {csv,json,xlsx}
                        Export raw data into csv, json, xlsx

Example (ticker is MSFT):

2022 Feb 16, 05:42 (✨) /stocks/fa/ $ fraud
AMscore Sub Stats:
   DSRI : 1.03
   GMI : 0.98
   AQI : 0.50
   SGI : 1.18
   DEPI : 1.07
   SGAI : 0.86
   LVGI : 0.95
   TATA : -0.05

MSCORE:  -2.62 (low chance of fraud)
ZSCORE:  -1.89 (high chance of bankruptcy)

McKee:  0.86 (high chance of bankruptcy)

Mscore:

The Beneish model is a statistical model that uses financial ratios calculated with accounting data of a specific company in order to check if it is likely (high probability) that the reported earnings of the company have been manipulated. A score of -5 to -2.22 indicated a low chance of fraud, a score of -2.22 to -1.78 indicates a moderate change of fraud, and a score above -1.78 indicated a high chance of fraud.[Source: Wikipedia]

DSRI: Days Sales in Receivables Index gauges whether receivables and revenue are out of balance, a large number is expected to be associated with a higher likelihood that revenues and earnings are overstated.

GMI: Gross Margin Index shows if gross margins are deteriorating. Research suggests that firms with worsening gross margin are more likely to engage in earnings management, therefore there should be a positive correlation between GMI and probability of earnings management.

AQI: Asset Quality Index measures the proportion of assets where potential benefit is less certain. A positive relation between AQI and earnings manipulation is expected.

SGI: Sales Growth Index shows the amount of growth companies are having. Higher growth companies are more likely to commit fraud so there should be a positive relation between SGI and earnings management.

DEPI: Depreciation Index is the ratio for the rate of depreciation. A DEPI greater than 1 shows that the depreciation rate has slowed and is positively correlated with earnings management.

SGAI: Sales General and Administrative Expenses Index measures the change in SG&A over sales. There should be a positive relationship between SGAI and earnings management.

LVGI: Leverage Index represents change in leverage. A LVGI greater than one indicates a lower change of fraud.

TATA: Total Accruals to Total Assets is a proxy for the extent that cash underlies earnigns. A higher number is associated with a higher likelihood of manipulation.

Zscore:

The Zmijewski Score is a bankruptcy model used to predict a firm's bankruptcy in two years. The ratio uses in the Zmijewski score were determined by probit analysis (think of probit as probability unit). In this case, scores less than .5 represent a higher probability of default. One of the criticisms that Zmijewski made was that other bankruptcy scoring models oversampled distressed firms and favored situations with more complete data.[Source: YCharts]

McKee Score:

The McKee Score is a bankruptcy model used to predict a firm's bankruptcy in one year. It looks at a companie's size, profitability, and liquidity to determine the probability. This model is 80% accurate in predicting bankruptcy. Source: McKee and Lensberg