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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 -1.33. The lowest was -3.97. And the median was -2.64.
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 * 1.0623||+||0.528 * 1.0127||+||0.404 * 0.9134||+||0.892 * 1.0293||+||0.115 * 0.9552|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0557||+||4.679 * -0.0116||-||0.327 * 1.024|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $983 Mil.|
Revenue was 1805 + 1766 + 1731 + 1679 = $6,981 Mil.
Gross Profit was 897 + 914 + 899 + 883 = $3,593 Mil.
Total Current Assets was $5,500 Mil.
Total Assets was $10,831 Mil.
Property, Plant and Equipment(Net PPE) was $1,101 Mil.
Depreciation, Depletion and Amortization(DDA) was $384 Mil.
Selling, General & Admin. Expense(SGA) was $2,043 Mil.
Total Current Liabilities was $1,702 Mil.
Long-Term Debt was $2,762 Mil.
Net Income was 23 + 147 + 139 + 195 = $504 Mil.
Non Operating Income was -65 + -20 + 4 + 0 = $-81 Mil.
Cash Flow from Operations was 164 + 28 + 325 + 194 = $711 Mil.
|Accounts Receivable was $899 Mil.
Revenue was 1718 + 1652 + 1732 + 1680 = $6,782 Mil.
Gross Profit was 908 + 856 + 891 + 880 = $3,535 Mil.
Total Current Assets was $4,983 Mil.
Total Assets was $10,686 Mil.
Property, Plant and Equipment(Net PPE) was $1,134 Mil.
Depreciation, Depletion and Amortization(DDA) was $372 Mil.
Selling, General & Admin. Expense(SGA) was $1,880 Mil.
Total Current Liabilities was $1,602 Mil.
Long-Term Debt was $2,699 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)|
|=||(983 / 6981)||/||(899 / 6782)|
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)|
|=||(914 / 6782)||/||(897 / 6981)|
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 - (5500 + 1101) / 10831)||/||(1 - (4983 + 1134) / 10686)|
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))|
|=||(372 / (372 + 1134))||/||(384 / (384 + 1101))|
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)|
|=||(2043 / 6981)||/||(1880 / 6782)|
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)|
|=||((2762 + 1702) / 10831)||/||((2699 + 1602) / 10686)|
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|
|=||(504 - -81||-||711)||/||10831|
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 -2.50 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