Abstract:
The Beneish M- Score method created by Professor MessodBeneish, it is basically a
mathematical model that uses eight different financial ratios that indicate whether the company
has manipulated it’s earning or not. Different variables are constructed from the financial
statements of the company and then it create a score that describes the intensity of the
manipulation in the company, higher the score higher the manipulation and vice-versa. Five out
of fifteen companies are selected whose share prices drops drastically due to financial crisis of
2008 in Karachi Stock Exchange. Then these companies are examined through the Beneish mscore
model, either these companies manipulated their earning or this drop of share prices is due
to some other reasons.
