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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 Accenture PLC was -1.39. The lowest was -3.71. And the median was -2.73.
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 Accenture PLC 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 * 1.0481||+||0.528 * 1.0034||+||0.404 * 1.1408||+||0.892 * 1.0657||+||0.115 * 1.0158|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9699||+||4.679 * -0.0602||-||0.327 * 0.9963|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Feb17) TTM:||Last Year (Feb16) TTM:|
|Accounts Receivable was $4,452 Mil.|
Revenue was 8762.182 + 9005.603 + 8965.58 + 8969.044 = $35,702 Mil.
Gross Profit was 2504.156 + 2730.032 + 2655.54 + 2689.552 = $10,579 Mil.
Total Current Assets was $10,764 Mil.
Total Assets was $20,079 Mil.
Property, Plant and Equipment(Net PPE) was $968 Mil.
Depreciation, Depletion and Amortization(DDA) was $750 Mil.
Selling, General & Admin. Expense(SGA) was $5,608 Mil.
Total Current Liabilities was $8,353 Mil.
Long-Term Debt was $25 Mil.
Net Income was 838.752 + 1004.476 + 1069.226 + 897.247 = $3,810 Mil.
Non Operating Income was -24.895 + -6.087 + 258.715 + -16.207 = $212 Mil.
Cash Flow from Operations was 154.703 + 1083.882 + 2055.439 + 1512.224 = $4,806 Mil.
|Accounts Receivable was $3,986 Mil.
Revenue was 8397.053 + 8465.984 + 8364.511 + 8275.066 = $33,503 Mil.
Gross Profit was 2369.816 + 2562.519 + 2504.405 + 2524.905 = $9,962 Mil.
Total Current Assets was $10,679 Mil.
Total Assets was $18,148 Mil.
Property, Plant and Equipment(Net PPE) was $856 Mil.
Depreciation, Depletion and Amortization(DDA) was $682 Mil.
Selling, General & Admin. Expense(SGA) was $5,425 Mil.
Total Current Liabilities was $7,573 Mil.
Long-Term Debt was $27 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)|
|=||(4452.252 / 35702.409)||/||(3986.141 / 33502.614)|
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)|
|=||(9961.645 / 33502.614)||/||(10579.28 / 35702.409)|
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 - (10764.002 + 968.433) / 20078.773)||/||(1 - (10678.8 + 856.403) / 18147.778)|
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))|
|=||(681.795 / (681.795 + 856.403))||/||(749.665 / (749.665 + 968.433))|
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)|
|=||(5607.527 / 35702.409)||/||(5425.214 / 33502.614)|
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)|
|=||((24.546 + 8352.773) / 20078.773)||/||((26.866 + 7573.179) / 18147.778)|
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|
|=||(3809.701 - 211.526||-||4806.248)||/||20078.773|
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.
Accenture PLC has a M-score of -2.59 suggests that the company will not 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
Accenture PLC Annual Data
Accenture PLC Quarterly Data