© D.L. Crumbley
Five Statistically Significant Ratios
Total Accruals to Total Assets =
Δ Working Capital t - Δ Cash t - Δ Current Taxes Payable t - Δ Current Portion of LTD t - Δ Accumulated depreciation and amortization t
Total Assets t
TATA for manipulators: .031
TATA for non manipulators: .018
Source: M.D. Beneish, “The Detection of Earnings Manipulation,” Financial Analysts Journal, September/October, 1999. LTD = Long-term debt.