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Aecom (NYSE:ACM)
Beneish M-Score
-1.56 (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.

Aecom has a M-score of -1.56 signals that the company is a manipulator.

ACM' s 10-Year Beneish M-Score Range
Min: -3.21   Max: 0.17
Current: -1.56

-3.21
0.17

During the past 13 years, the highest Beneish M-Score of Aecom was 0.17. The lowest was -3.21. And the median was -2.33.


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 Aecom 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 * 1.5451+0.528 * 1.2042+0.404 * 1.291+0.892 * 1.3089+0.115 * 1.489
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7049+4.679 * -0.031-0.327 * 1.1497
=-1.56

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $4,874 Mil.
Revenue was 4186.035 + 2562.529 + 1968.155 + 1872.224 = $10,589 Mil.
Gross Profit was 164.223 + 129.031 + 108.54 + 87.407 = $489 Mil.
Total Current Assets was $6,101 Mil.
Total Assets was $14,253 Mil.
Property, Plant and Equipment(Net PPE) was $863 Mil.
Depreciation, Depletion and Amortization(DDA) was $175 Mil.
Selling, General & Admin. Expense(SGA) was $91 Mil.
Total Current Liabilities was $4,413 Mil.
Long-Term Debt was $4,775 Mil.
Net Income was -103.503 + 64.026 + 69.24 + 40.192 = $70 Mil.
Non Operating Income was 2.579 + 1.892 + 1.034 + -0.195 = $5 Mil.
Cash Flow from Operations was 282.642 + 174.916 + 79.713 + -31.391 = $506 Mil.
Accounts Receivable was $2,410 Mil.
Revenue was 1953.875 + 2079.087 + 2067.49 + 1989.646 = $8,090 Mil.
Gross Profit was 78.198 + 140.213 + 131.814 + 99.843 = $450 Mil.
Total Current Assets was $3,249 Mil.
Total Assets was $5,837 Mil.
Property, Plant and Equipment(Net PPE) was $276 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $99 Mil.
Total Current Liabilities was $2,160 Mil.
Long-Term Debt was $1,113 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)
=(4873.911 / 10588.943) / (2410.041 / 8090.098)
=0.46028305 / 0.2979001
=1.5451

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)
=(129.031 / 8090.098) / (164.223 / 10588.943)
=0.05563196 / 0.04619923
=1.2042

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 - (6100.785 + 862.64) / 14253.269) / (1 - (3248.847 + 275.897) / 5837.421)
=0.51145067 / 0.39618129
=1.291

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
=10588.943 / 8090.098
=1.3089

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))
=(92.702 / (92.702 + 275.897)) / (175.318 / (175.318 + 862.64))
=0.25149824 / 0.16890664
=1.489

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)
=(91.401 / 10588.943) / (99.061 / 8090.098)
=0.00863174 / 0.01224472
=0.7049

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)
=((4775.396 + 4413.077) / 14253.269) / ((1113.452 + 2159.67) / 5837.421)
=0.64465724 / 0.56071371
=1.1497

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
=(69.955 - 5.31 - 505.88) / 14253.269
=-0.031

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.

Aecom has a M-score of -1.56 signals that the company is likely to 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 own currency.

Aecom Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.90830.96531.22360.89831.17070.89320.98450.4591.0518
GMI 1.06830.96614.96190.96230.87311.1321.13120.93011.1439
AQI 0.95710.91041.09231.01681.09391.10020.90471.03270.9841
SGI 1.42841.23841.2261.1781.06971.22791.02250.99211.0249
DEPI 0.65481.10761.25910.81641.15040.91961.05830.92851.023
SGAI 0.97391.01520.05661.04511.18840.66570.87621.21240.8112
LVGI 0.91310.73461.23770.88651.17730.96851.03111.05240.9997
TATA -0.0406-0.02420.0017-0.01070.0130.0243-0.0887-0.0305-0.0218
M-score -2.36-2.370.18-2.47-2.30-2.09-2.84-3.21-2.41

Aecom Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.98450.97810.91490.95390.4590.9851.03091.07611.05181.5451
GMI 1.13121.1130.98550.91030.93010.89730.96451.05741.14391.2042
AQI 0.90470.92930.92990.94321.03271.03331.06761.02080.98411.291
SGI 1.02251.00930.99760.98840.99210.98580.97410.96521.02491.3089
DEPI 1.05831.00920.98550.8990.92850.95010.96881.05491.0231.489
SGAI 0.87620.88851.02451.11051.21241.24991.1491.10470.81120.7049
LVGI 1.03111.08351.07331.10191.05241.00050.96110.94840.99971.1497
TATA -0.0887-0.1006-0.1141-0.0977-0.0305-0.0384-0.0214-0.0184-0.0218-0.031
M-score -2.84-2.94-3.16-3.12-3.21-2.78-2.58-2.48-2.41-1.56
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