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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
-2.61 (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 -2.64 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: -2.61

-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 * 1.0006+0.528 * 0.9667+0.404 * 1.0605+0.892 * 1.0406+0.115 * 1.0621
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0127+4.679 * -0.0409-0.327 * 1.0409
=-2.64

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

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $631 Mil.
Revenue was 1111 + 1044 + 1019 + 1028 = $4,202 Mil.
Gross Profit was 588 + 542 + 530 + 537 = $2,197 Mil.
Total Current Assets was $3,635 Mil.
Total Assets was $7,802 Mil.
Property, Plant and Equipment(Net PPE) was $639 Mil.
Depreciation, Depletion and Amortization(DDA) was $246 Mil.
Selling, General & Admin. Expense(SGA) was $1,253 Mil.
Total Current Liabilities was $945 Mil.
Long-Term Debt was $1,912 Mil.
Net Income was 126 + 124 + 91 + 123 = $464 Mil.
Non Operating Income was -16 + 2 + 1 + 3 = $-10 Mil.
Cash Flow from Operations was 234 + 199 + 256 + 104 = $793 Mil.
Accounts Receivable was $606 Mil.
Revenue was 1035 + 1014 + 963 + 1026 = $4,038 Mil.
Gross Profit was 535 + 513 + 480 + 513 = $2,041 Mil.
Total Current Assets was $3,686 Mil.
Total Assets was $7,479 Mil.
Property, Plant and Equipment(Net PPE) was $604 Mil.
Depreciation, Depletion and Amortization(DDA) was $253 Mil.
Selling, General & Admin. Expense(SGA) was $1,189 Mil.
Total Current Liabilities was $976 Mil.
Long-Term Debt was $1,655 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)
=(631 / 4202) / (606 / 4038)
=0.15016659 / 0.15007429
=1.0006

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)
=(2041 / 4038) / (2197 / 4202)
=0.50544824 / 0.52284626
=0.9667

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 + 639) / 7802) / (1 - (3686 + 604) / 7479)
=0.45219175 / 0.4263939
=1.0605

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
=4202 / 4038
=1.0406

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))
=(253 / (253 + 604)) / (246 / (246 + 639))
=0.29521587 / 0.2779661
=1.0621

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)
=(1253 / 4202) / (1189 / 4038)
=0.29819134 / 0.2944527
=1.0127

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)
=((1912 + 945) / 7802) / ((1655 + 976) / 7479)
=0.36618816 / 0.351785
=1.0409

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
=(464 - -10 - 793) / 7802
=-0.0409

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 -2.64 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 -0.0086-0.00310.0089-0.0097-0.0171-0.0251-0.0326-0.0427-0.0409-0.0363
M-score -2.74-2.63-2.42-2.14-2.62-2.58-2.58-2.68-2.64-2.61
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