From the original Beneish paper

DSRI is the ratio of days sales in receivable in the first year in which earnings manipulation is uncovered (year t) to the corresponding measure in year t-1. This variable gauges whether receivables and revenues are in or out-of-balance in two consecutive years. A large increase in days sales in receivables could be the result of a change in credit policy to spur sales in the face of increased competition, but disproportionate increases in receivables relative to sales may also be suggestive of revenue inflation. I thus expect a large increase in days sales in receivables to be associated with a higher likelihood that revenues and earnings are overstated

Beneish Formula

(Receivables{t}/Sales{t}) / (Receivables{t-1}/Sales{t-1})

Our Formula

(RecvblQ/SalesTTM) / (RecvblPYQ/SalesPTM)

NOTE: If Receivables during preliminary reporting are N/A , the whole formula excludes the latest period

Related Factors:

BeneishMScore MScoreAQI MScoreDEPAMI MScoreDEPI MScoreDSRI MScoreGMI MScoreLVGI MScoreSGAI MScoreSGAI MScoreTATA