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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 12 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 0.96531.22360.89831.17070.89320.98450.4591.0518
GMI 0.96614.96190.96230.87311.1321.13120.93011.1439
AQI 0.91041.09231.01681.09391.10020.90471.03270.9841
SGI 1.23841.2261.1781.06971.22791.02250.99211.0249
DEPI 1.10761.25910.81641.15040.91961.05830.92851.023
SGAI 1.01520.05661.04511.18840.66570.87621.21240.8112
LVGI 0.73461.23770.88651.17730.96851.03111.05240.9997
TATA -0.02420.0017-0.01070.0130.0243-0.0887-0.0305-0.0218
M-score -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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