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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 Aecom was 0.17. The lowest was -3.21. And the median was -2.30.
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 * 0.8482||+||0.528 * 1.5349||+||0.404 * 1.283||+||0.892 * 2.1498||+||0.115 * 0.5478|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6553||+||4.679 * -0.0644||-||0.327 * 1.1946|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $4,841 Mil.|
Revenue was 4723.637 + 4549.578 + 4506.197 + 4186.035 = $17,965 Mil.
Gross Profit was 170.628 + 126.518 + 103.312 + 164.223 = $565 Mil.
Total Current Assets was $6,246 Mil.
Total Assets was $14,014 Mil.
Property, Plant and Equipment(Net PPE) was $699 Mil.
Depreciation, Depletion and Amortization(DDA) was $599 Mil.
Selling, General & Admin. Expense(SGA) was $114 Mil.
Total Current Liabilities was $4,836 Mil.
Long-Term Debt was $4,447 Mil.
Net Income was 1.056 + -17.192 + 0.266 + -103.503 = $-119 Mil.
Non Operating Income was 7.47 + 10.128 + -1.038 + 2.579 = $19 Mil.
Cash Flow from Operations was 278.029 + 153.802 + 49.96 + 282.642 = $764 Mil.
|Accounts Receivable was $2,655 Mil.
Revenue was 2562.529 + 1968.155 + 1872.224 + 1953.875 = $8,357 Mil.
Gross Profit was 129.031 + 108.54 + 87.407 + 78.198 = $403 Mil.
Total Current Assets was $3,434 Mil.
Total Assets was $6,123 Mil.
Property, Plant and Equipment(Net PPE) was $282 Mil.
Depreciation, Depletion and Amortization(DDA) was $95 Mil.
Selling, General & Admin. Expense(SGA) was $81 Mil.
Total Current Liabilities was $2,456 Mil.
Long-Term Debt was $940 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)|
|=||(4841.45 / 17965.447)||/||(2654.976 / 8356.783)|
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)|
|=||(126.518 / 8356.783)||/||(170.628 / 17965.447)|
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 - (6246.085 + 699.322) / 14014.298)||/||(1 - (3434.113 + 281.979) / 6123.377)|
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))|
|=||(95.394 / (95.394 + 281.979))||/||(599.265 / (599.265 + 699.322))|
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)|
|=||(113.975 / 17965.447)||/||(80.908 / 8356.783)|
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)|
|=||((4446.527 + 4836.052) / 14014.298)||/||((939.565 + 2455.769) / 6123.377)|
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|
|=||(-119.373 - 19.139||-||764.433)||/||14014.298|
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 -1.55 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
Aecom Annual Data
Aecom Quarterly Data