Thursday Jan 15, 2015

The Altman Z-score and Bennish M Score in PSRM Analytics

As part of the new version of PSRM Analytics, we introduced the Altman Z Score and the Beneish Model M Score in the product.  The following is an explanation of each calculation.  

Altman Z-Score

NYU Stern Finance Professor, Edward Altman, developed the Altman Z-score formula in 1967. In 2012, he released an updated version called the Altman Z-score Plus, that can be used to evaluate both public and private companies, both manufacturing and non-manufacturing companies and both U.S. and non-U.S. companies. Investors can use Altman Z-scores to help determine whether they should buy or sell a particular stock if they're concerned about the underlying company's financial strength. The Altman Z-score Plus can be used to evaluate corporate credit risk.

Definition of 'ALTMAN Z-SCORE'

The output of a credit-strength test that gauges a publicly traded manufacturing company's likelihood of bankruptcy. The Altman Z-score, is based on five financial ratios that can be calculated from data found on a company's annual 10K report. The Altman Z-score is calculated as follows:

Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E


A = Working Capital/Total Assets
B = Retained Earnings/Total Assets
C = Earnings Before Interest & Tax/Total Assets
D = Market Value of Equity/Total Liabilities
E = Sales/Total Assets

A score below 1.8 means the company is probably headed for bankruptcy, while companies with scores above 3.0 are not likely to go bankrupt. The lower/higher the score, the higher/lower the likelihood of bankruptcy.

Beneish Model - M Score

Created by Professor Messod Beneish, the M-Score is a mathematical model that uses eight financial ratios to identify whether a company has managed / manipulated its earnings. The variables are constructed from the company's financial statements and create a score to describe the degree to which the earnings have been manipulated. In many ways it is similar to the Altman Z-Score, but it is focused on  detecting earnings manipulation rather than bankruptcy. 

Interestingly, students from Cornell University using the M score correctly identified Enron as an earnings manipulator, while experienced financial analysts failed to do so.

- See more at:

Calculation / Definition of the M-Score 

The M score is based on a combination of the following eight different indices:

  1. DSRI = Days’ Sales in Receivables Index. This measures the ratio of days’ sales in receivables versus prior year as an indicator of revenue inflation.
  2. GMI = Gross Margin Index. This is measured as the ratio of gross margin versus prior year. A firm with poorer prospects is more likely to manipulate earnings.
  3. AQI = Asset Quality Index. Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets, versus prior year.
  4. SGI = Sales Growth Index. This measures the ratio of sales versus prior year. While sales growth is not itself a measure of manipulation, the evidence suggests that growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
  5. DEPI = Depreciation Index. This is measured as the ratio of the rate of depreciation versus prior year. A slower rate of depreciation may mean that the firm is revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
  6. SGAI = Sales, General and Administrative expenses Index. This measures the ratio of SGA expenses to the prior year. This is used on the assumption that analysts would interpret a disproportionate increase in sales as a negative signal about firms future prospects
  7. LVGI = Leverage Index. This measures the ratio of total debt to total assets versus prior year. It is intended to capture debt covenants incentives for earnings manipulation.
  8. TATA - Total Accruals to Total Assets.  This assesses the extent to which managers make discretionary accounting choices to alter earnings. Total accruals are calculated as the change in working capital accounts other than cash less depreciation.

The eight variables are then weighted together according to the following formula:

  • M = -4.84 + 0.92*DSRI + 0.528*GMI + 0.404*AQI + 0.892*SGI + 0.115*DEPI – 0.172*SGAI + 4.679*TATA – 0.327*LVGI

There is also a five variable version which excludes SGAI, DEPI and LVGI (as these were not significant in the original Beneish model).

  • M  = -6.065 + 0.823*DSRI + 0.906*GMI + 0.593*AQI + 0.717*SGI + 0.107*DEP

The exact threshold varies depending on the probability of mis-classification but, broadly speaking, a score greater than -1.78 (i.e. less negative or positive number) indicates a strong likelihood of a firm being a manipulator.

Wednesday Jan 14, 2015

PSRM Analytics v2.1 Datasheet now available

We are pleased to announce that a new datasheet for PSRM Analytics version 2.1 is now available:  

PSRM v2.4.0 Installation Walkthrough for Linux

The Oracle Global Customer Support team has recorded a subtitled video that demonstrates how to install Oracle PSRM 2.4.0 (and later versions) on a Linux environment. This video can be found on My Oracle Support under document 1608404.1.

This process can be used for either a new PSRM 2.4.0 installation or upgrading an existing installation to (2.4 SP1).

Monday Jan 05, 2015

Oracle PSRM Fundamentals recordings now available on the PSRM Training YouTube channel

We are pleased to announce that a new PSRM Fundamentals Overview series is now available on the PSRM YouTube channel.  This includes 15 videos, each about 10 to 20 minutes long (on average), covering many of the key business function areas in the PSRM.  This provides a nice introduction to PSRM to supplement training.  


(or, go to YouTube, and search for "Oracle PSRM Training").

Friday Nov 21, 2014

Oracle PSRM Self Service v1.1 Service Pack 1 demonstration database is now available

We are pleased to announce that the Oracle PSRM Self Service demonstration database for PSRMSS v1.1 Service Pack 1 is now available. You may download it from MyOracleSupport using patch ID 18978475.  The download is password protected, please contact Oracle Support if you need to download it.  

 This release of PSRM Self Service demo data includes configuration data for the new PSRMSS v1.1 and PSRM v2.4 features.  The demo data for PSRMSS and PSRM are now combined, to simplify playpen and demo usage of PSRM together with Self Service.   

Tuesday Oct 21, 2014

Oracle PSRM v2.4.0 Batch Benchmark Data Sheet

A recent batch performance benchmark was performed on Oracle PSRM v2.4.0 to ensure that prior benchmark results were at least maintained if not improved upon when using the latest version of the product. The benchmark showed that Oracle PSRM v2.4.0 processed the same amount of data in a shorter period of time with better scalability and throughtput compared to Oracle PSRM v2.3.1.

See this data sheet for more information about this benchmark, including a reference to the detailed report on My Oracle Support.

Thursday Oct 09, 2014

Oracle Public Sector Revenue Management Analytics v2.1 is now Generally Available!!!

We are pleased to announce the General Availability release of Oracle PSRM Analytics v2.1.  The release is now available for download on the Oracle Software Delivery Cloud.  

The Oracle PSRM Analytics v2.1 release contains following new features:

  • Payment Analytics, with tons of new KPIs, operational dashaboards, and compliance dashboards
  • Financial Balance Sheet Analytics, using XBRL corporate balance sheet data
  • Predictive Analytics, including support for
    • Beneish M-Score, which predicts the propensity for fraud by scoring the likelihood that a business is manipulating their corporate balance sheet reporting
    • Altman Z-score, which predicts the likelihood that a business will be bankrupt soon based on the corporate balance sheet reportings
  • Re-branding form Oracle Tax Analytics (OTA) to the Public Sector Revenue Management brand

Please refer to the PSRM documentation library on the Oracle Technical Network for the product documentation associated with this release. The Release Notes document includes more details.  

Oracle Public Sector Revenue Management Analytics is pre-built enterprise data warehouse solution for public sector authorities.  The solution includes pre-built data model, pre-built analytical models, operational reports, KPIs, dashbaords, and metrics.  PSRM Analytics includes everything you need to quickly stand up a data warehouse, just load the data it it works from day 1.  The solution is flexible, extensible, and upgradeable, and built on world class Oracle BI technology.  .  

Friday Oct 03, 2014

Oracle Public Sector Revenue Management Self Service V1. (Service Pack 1 ) is now Generally Available!

Oracle PSRM Self Service v1.  is now available for download on My Oracle Support. This version of product is integrated Oracle Public Sector Revenue Management (2.4.0 SP1).

Oracle PSRM Self Service v1. release contains following new features:

  • User registration and enrollment
  • Taxpayer personal information
  • Account summary with current state of all user’s tax accounts
  • Filing history
  • Payment history: received payments, their dates and amount
  • Payments and service requests for registered users
  • Account alerts including due date reminders, overdue warnings, collection notifications, payments and refund related notice
  • Tax form filing, pre-population,  validation, printing and submission
  • Filing guided assistance and personal help
  • Tax form designer to define form layout, presentation and business rules
  • Form definition import  from PSRM
  • Tax form integration with BI Publisher for form printing


Please refer to the Oracle Technical Network for the product documentation associated with this release. The Release Notes document includes more details on these and other enhancements as well as future deprecation announcements.

Friday Sep 19, 2014

Oracle PSRM Forms Configuration training now available on YouTube

We are pleased to announce that a new series of Oracle PSRM training and recordings have been posted on our PSRM YouTube channel. 

This is intended as a freely accessible, self paced tutorial to PSRM Forms Configuration, from a hands on perspective.  These recordings are somewhat technical in nature, and intended for Oracle PSRM configurers.  These videos are intended as a supplement, not a substitute, for Oracle PSRM classroom training.

[Read More]

Tuesday Sep 16, 2014

Press Release for Ohio STARS

The Ohio STARS project went live on Sales and Use Tax in July, 2014.  Since Employer Withholding and School District Withholding went live in October 2013, and Natural Gas Tax and Tire Replacement Fee went live in February 2014, that means Ohio STARS had 3 go lives in 9 months!  The following press release was just issued:

It was picked up by Yahoo right away:

Friday Sep 12, 2014

PSRM (2.4.0 SP1) is now Generally Available!

Oracle PSRM 2.4.0 Service Pack 1 ( is now available for download on My Oracle Support. This Service Pack release includes a variety of new and enhanced features, including:

  • Integration with Oracle PSRM Self Service
  • Form User Interface Performance Improvements
  • New Form Rules for Overpayment and Customer Contact Creation
  • Payment Upload Enhancements
  • Auto Pay Enhancements
  • New Bank Event object for use in Direct Deposit processing
  • Support for Suppressing Letters (Customer Contacts)
  • Configuration Migration Assistant Migration Plans and Requests
  • SEPA Direct Debit Enhancements

Please refer to the Oracle Technical Network for the product documentation associated with this release. The Release Notes document includes more details on these and other enhancements as well as future deprecation announcements.

See My Oracle Support Patch 18167511: Oracle Public Sector Revenue Management (Service Pack 1) for the download file including product documentation and installation documents.

Please note: Standard Oracle support policies provide support for previous Service Packs (4th digit release) for three months after the release of a new Service Pack. The release of Oracle PSRM means that we will continue to support patches on Oracle PSRM for the next three months. Projects using Oracle PSRM must start planning to move to PSRM during this time to avoid support impacts.

Accessibility Update: Oracle PSRM and PSRM Self Service VPATs are now available

VPATs for Oracle PSRM and PSRM Self Service have been published on Oracle's Accessibility portal.
[Read More]

Thursday Aug 14, 2014

Now Available: CMA Overview Webcast

A new webcast is available that introduces the new Configuration Migration Assistant (CMA) features that are available in Oracle PSRM Click this link to learn more about CMA:

Monday Jul 28, 2014

Need to View PSRM base product Source Code? Yes, this is possible!

From time to time we receive a request to view base PSRM source.  For example, you may need it to help troubleshoot or analyze something, or you may want to use it to accelerate your site specific plug-ins.  [Read More]

Tuesday Jul 22, 2014

Oracle Public Sector Revenue Management v2.4 Dutch UI Language Pack Available Now

We are pleased to announce the general availability of Oracle Tax PSRM v2.4 UI Dutch.

[Read More]

This blog is for our Oracle Public Sector Revenue Management customers, delivery partners, and even our fellow Oracle professionals, and is dedicated to all things Oracle Tax and Revenue Management. We will focus on support and implementation tips, announcements, and FAQs (frequently asked questions) for all of our Oracle Public Sector Revenue Management products. This include Oracle Public Sector Revenue Management (PSRM), Oracle Tax Analytics, and our Oracle PSRM Self Service and integration products.


« March 2015