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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 6 years, the highest Beneish M-Score of Acadia Healthcare Co Inc was -1.87. The lowest was -2.36. And the median was -2.01.
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 Acadia Healthcare Co 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 * 1.0245||+||0.528 * 0.919||+||0.404 * 1.3596||+||0.892 * 1.7863||+||0.115 * 0.8266|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.5708||+||4.679 * -0.0182||-||0.327 * 1.052|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $217 Mil.|
Revenue was 495.319 + 479.73 + 453.66 + 365.783 = $1,794 Mil.
Gross Profit was 206.937 + 199.686 + 189.816 + 143.658 = $740 Mil.
Total Current Assets was $295 Mil.
Total Assets was $4,279 Mil.
Property, Plant and Equipment(Net PPE) was $1,709 Mil.
Depreciation, Depletion and Amortization(DDA) was $64 Mil.
Selling, General & Admin. Expense(SGA) was $186 Mil.
Total Current Liabilities was $290 Mil.
Long-Term Debt was $2,195 Mil.
Net Income was 41.557 + 29.55 + 33.844 + 14.594 = $120 Mil.
Non Operating Income was -0.839 + -10.997 + -30.99 + 0.053 = $-43 Mil.
Cash Flow from Operations was 98.318 + 50.944 + 72.919 + 18.222 = $240 Mil.
|Accounts Receivable was $118 Mil.
Revenue was 294.901 + 294.479 + 213.803 + 201.418 = $1,005 Mil.
Gross Profit was 114.469 + 111.785 + 80.734 + 73.779 = $381 Mil.
Total Current Assets was $274 Mil.
Total Assets was $2,207 Mil.
Property, Plant and Equipment(Net PPE) was $1,070 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $66 Mil.
Total Current Liabilities was $166 Mil.
Long-Term Debt was $1,053 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)|
|=||(216.626 / 1794.492)||/||(118.378 / 1004.601)|
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)|
|=||(199.686 / 1004.601)||/||(206.937 / 1794.492)|
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 - (294.736 + 1709.053) / 4279.208)||/||(1 - (274.143 + 1069.7) / 2206.955)|
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))|
|=||(32.667 / (32.667 + 1069.7))||/||(63.55 / (63.55 + 1709.053))|
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)|
|=||(185.562 / 1794.492)||/||(66.132 / 1004.601)|
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)|
|=||((2195.384 + 290.203) / 4279.208)||/||((1052.67 + 165.934) / 2206.955)|
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|
|=||(119.545 - -42.773||-||240.403)||/||4279.208|
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.
Acadia Healthcare Co Inc has a M-score of -1.87 signals that the company is likely to 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
Acadia Healthcare Co Inc Annual Data
Acadia Healthcare Co Inc Quarterly Data