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GuruFocus has detected 6 Warning Signs with Agilent Technologies Inc $A.
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Agilent Technologies Inc (NYSE:A)
Beneish M-Score
-2.60 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Agilent Technologies Inc has a M-score of -2.60 suggests that the company is not a manipulator.

A' s Beneish M-Score Range Over the Past 10 Years
Min: -4.33   Max: -0.47
Current: -2.6

-4.33
-0.47

During the past 13 years, the highest Beneish M-Score of Agilent Technologies Inc was -0.47. The lowest was -4.33. And the median was -2.62.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Agilent Technologies Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0082+0.528 * 0.9703+0.404 * 1.0047+0.892 * 1.0498+0.115 * 1.1224
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9969+4.679 * -0.0354-0.327 * 1.0314
=-2.60

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $653 Mil.
Revenue was 1067 + 1111 + 1044 + 1019 = $4,241 Mil.
Gross Profit was 574 + 588 + 542 + 530 = $2,234 Mil.
Total Current Assets was $3,635 Mil.
Total Assets was $7,872 Mil.
Property, Plant and Equipment(Net PPE) was $653 Mil.
Depreciation, Depletion and Amortization(DDA) was $235 Mil.
Selling, General & Admin. Expense(SGA) was $1,238 Mil.
Total Current Liabilities was $1,089 Mil.
Long-Term Debt was $1,802 Mil.
Net Income was 168 + 126 + 124 + 91 = $509 Mil.
Non Operating Income was 3 + -16 + 2 + 1 = $-10 Mil.
Cash Flow from Operations was 116 + 234 + 199 + 249 = $798 Mil.
Accounts Receivable was $617 Mil.
Revenue was 1028 + 1035 + 1014 + 963 = $4,040 Mil.
Gross Profit was 537 + 535 + 513 + 480 = $2,065 Mil.
Total Current Assets was $3,399 Mil.
Total Assets was $7,302 Mil.
Property, Plant and Equipment(Net PPE) was $594 Mil.
Depreciation, Depletion and Amortization(DDA) was $251 Mil.
Selling, General & Admin. Expense(SGA) was $1,183 Mil.
Total Current Liabilities was $947 Mil.
Long-Term Debt was $1,653 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(653 / 4241) / (617 / 4040)
=0.15397312 / 0.15272277
=1.0082

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(2065 / 4040) / (2234 / 4241)
=0.51113861 / 0.52676256
=0.9703

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3635 + 653) / 7872) / (1 - (3399 + 594) / 7302)
=0.45528455 / 0.45316352
=1.0047

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=4241 / 4040
=1.0498

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(251 / (251 + 594)) / (235 / (235 + 653))
=0.29704142 / 0.26463964
=1.1224

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1238 / 4241) / (1183 / 4040)
=0.29191228 / 0.29282178
=0.9969

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((1802 + 1089) / 7872) / ((1653 + 947) / 7302)
=0.36725102 / 0.35606683
=1.0314

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(509 - -10 - 798) / 7872
=-0.0354

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Agilent Technologies Inc has a M-score of -2.60 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Agilent Technologies Inc Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15Oct16
DSRI 0.97450.98340.99571.20220.81451.03521.71540.66980.97041.0006
GMI 0.97570.98961.08220.95041.00891.01521.07311.00320.96580.9667
AQI 1.14061.04970.86070.71261.04321.64270.94981.0110.98641.0605
SGI 1.08991.06530.77611.21491.21511.03670.56781.03950.99751.0406
DEPI 0.93430.98191.2190.94140.85040.97810.83180.65291.28151.0621
SGAI 0.93960.9371.21720.89960.84980.96881.14760.97410.99411.0127
LVGI 1.20410.99331.07291.0280.76520.91351.05880.77071.1341.0409
TATA -0.0445-0.0133-0.0602-0.0243-0.031-0.0086-0.0398-0.0086-0.0171-0.0411
M-score -2.65-2.47-3.01-2.36-2.50-2.16-2.44-2.74-2.62-2.64

Agilent Technologies Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.66980.5740.39120.29730.97041.00971.03110.99071.00061.0082
GMI 1.00320.98010.93430.86310.96580.95220.9460.94410.96670.9703
AQI 1.0111.03811.05521.03560.98641.04681.07421.05381.06051.0047
SGI 1.03951.26191.63082.20490.99750.99361.01361.01981.04061.0498
DEPI 0.65290.67520.70950.77111.28151.24071.20381.1441.06211.1224
SGAI 0.97410.96150.91330.85190.99410.98320.99481.0011.01270.9969
LVGI 0.77070.86210.87190.95491.1341.03531.04561.04781.04091.0314
TATA -0.0086-0.00310.0089-0.0097-0.0171-0.0263-0.0329-0.0429-0.0411-0.0354
M-score -2.74-2.63-2.42-2.14-2.62-2.59-2.58-2.68-2.64-2.60
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