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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 -1.79. 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 * 0.915||+||0.528 * 0.9326||+||0.404 * 0.7752||+||0.892 * 1.7499||+||0.115 * 1.3835|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0913||+||4.679 * -0.0117||-||0.327 * 0.9407|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $277 Mil.|
Revenue was 616.813 + 495.319 + 479.73 + 453.66 = $2,046 Mil.
Gross Profit was 249.1 + 206.937 + 199.686 + 189.816 = $846 Mil.
Total Current Assets was $393 Mil.
Total Assets was $6,696 Mil.
Property, Plant and Equipment(Net PPE) was $3,338 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $187 Mil.
Total Current Liabilities was $409 Mil.
Long-Term Debt was $3,498 Mil.
Net Income was 25.688 + 34.566 + 29.55 + 33.844 = $124 Mil.
Non Operating Income was 0.41 + -37.41 + -10.997 + -30.99 = $-79 Mil.
Cash Flow from Operations was 58.664 + 98.318 + 50.944 + 72.919 = $281 Mil.
|Accounts Receivable was $173 Mil.
Revenue was 365.783 + 294.901 + 294.479 + 213.803 = $1,169 Mil.
Gross Profit was 143.658 + 114.469 + 111.785 + 80.734 = $451 Mil.
Total Current Assets was $325 Mil.
Total Assets was $3,627 Mil.
Property, Plant and Equipment(Net PPE) was $1,230 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $98 Mil.
Total Current Liabilities was $231 Mil.
Long-Term Debt was $2,019 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)|
|=||(276.88 / 2045.522)||/||(172.938 / 1168.966)|
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)|
|=||(206.937 / 1168.966)||/||(249.1 / 2045.522)|
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 - (393.265 + 3337.765) / 6696.359)||/||(1 - (325.378 + 1229.677) / 3627.145)|
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))|
|=||(40.335 / (40.335 + 1229.677))||/||(78.421 / (78.421 + 3337.765))|
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)|
|=||(187.4 / 2045.522)||/||(98.131 / 1168.966)|
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)|
|=||((3497.569 + 408.81) / 6696.359)||/||((2018.681 + 230.66) / 3627.145)|
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|
|=||(123.648 - -78.987||-||280.845)||/||6696.359|
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 -2.02 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