From the original Beneish paper

SGAI is calculated as the ratio of SGA to sales in year t relative to the corresponding measure in year t-1. The variable is used following Lev and Thiagarajan's (1993) suggestion that analysts would interpret a disproportionate increase in sales as a negative signal about firms future prospects. I expect a positive relation between SGAI and the probability of manipulation.

Beneish Formula

(SG&A{t}/Sales{t}) / (SG&A{t-1}/Sales{t-1})

If meaningful data is not available, set score equal to neutral (1.00)

Our Formula

ISNA(((SGandATTM/SalesTTM)/(SGandAPTM/SalesPTM)),1)

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

Related Factors:

BeneishMScore MScoreAQI MScoreDEPAMI MScoreDEPI MScoreDSRI MScoreGMI MScoreLVGI MScoreSGAI MScoreSGAI MScoreTATA