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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.
During the past 13 years, the highest Beneish M-Score of Agilent Technologies Inc was -1.04. The lowest was -4.33. And the median was -2.68.
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 * 0.6994||+||0.528 * 1.017||+||0.404 * 1.0381||+||0.892 * 1.0357||+||0.115 * 0.6752|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.063||+||4.679 * -0.0063||-||0.327 * 0.8621|
|This Year (Jan15) TTM:||Last Year (Jan14) TTM:|
|Accounts Receivable was $615 Mil.|
Revenue was 1026 + 1805 + 1766 + 1731 = $6,328 Mil.
Gross Profit was 513 + 897 + 914 + 899 = $3,223 Mil.
Total Current Assets was $3,654 Mil.
Total Assets was $7,519 Mil.
Property, Plant and Equipment(Net PPE) was $610 Mil.
Depreciation, Depletion and Amortization(DDA) was $356 Mil.
Selling, General & Admin. Expense(SGA) was $1,865 Mil.
Total Current Liabilities was $928 Mil.
Long-Term Debt was $1,658 Mil.
Net Income was 72 + 23 + 147 + 139 = $381 Mil.
Non Operating Income was 12 + -65 + -20 + 4 = $-69 Mil.
Cash Flow from Operations was -20 + 164 + 28 + 325 = $497 Mil.
|Accounts Receivable was $849 Mil.
Revenue was 1008 + 1718 + 1652 + 1732 = $6,110 Mil.
Gross Profit was 510 + 908 + 856 + 891 = $3,165 Mil.
Total Current Assets was $5,073 Mil.
Total Assets was $10,638 Mil.
Property, Plant and Equipment(Net PPE) was $1,129 Mil.
Depreciation, Depletion and Amortization(DDA) was $374 Mil.
Selling, General & Admin. Expense(SGA) was $1,694 Mil.
Total Current Liabilities was $1,549 Mil.
Long-Term Debt was $2,695 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(615 / 6328)||/||(849 / 6110)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(897 / 6110)||/||(513 / 6328)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (3654 + 610) / 7519)||/||(1 - (5073 + 1129) / 10638)|
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.
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))|
|=||(374 / (374 + 1129))||/||(356 / (356 + 610))|
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)|
|=||(1865 / 6328)||/||(1694 / 6110)|
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)|
|=||((1658 + 928) / 7519)||/||((2695 + 1549) / 10638)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(381 - -69||-||497)||/||7519|
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 -2.73 suggests that the company will not be a manipulator.
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
Agilent Technologies Inc Annual Data
Agilent Technologies Inc Quarterly Data