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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 -2.79.
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 * 1.0576||+||0.528 * 1.0038||+||0.404 * 1.1775||+||0.892 * 1.022||+||0.115 * 1.0615|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9982||+||4.679 * -0.0378||-||0.327 * 0.9461|
|This Year (Feb16) TTM:||Last Year (Feb15) TTM:|
|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.
Net Income was 1326.52 + 818.899 + 737.628 + 793.697 = $3,677 Mil.
Non Operating Income was 532.364 + 4.029 + -16.426 + -3.839 = $516 Mil.
Cash Flow from Operations was 317.346 + 611.305 + 1504.586 + 1413.364 = $3,847 Mil.
|Accounts Receivable was $3,688 Mil.
Revenue was 7931.59 + 8343.257 + 8267.319 + 8240.18 = $32,782 Mil.
Gross Profit was 2240.639 + 2539.29 + 2468.62 + 2536.357 = $9,785 Mil.
Total Current Assets was $11,008 Mil.
Total Assets was $16,992 Mil.
Property, Plant and Equipment(Net PPE) was $726 Mil.
Depreciation, Depletion and Amortization(DDA) was $645 Mil.
Selling, General & Admin. Expense(SGA) was $5,318 Mil.
Total Current Liabilities was $7,494 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)|
|=||(3986.141 / 33502.614)||/||(3688.052 / 32782.346)|
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)|
|=||(2562.519 / 32782.346)||/||(2369.816 / 33502.614)|
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 - (10678.8 + 856.403) / 18147.778)||/||(1 - (11007.808 + 725.917) / 16991.565)|
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))|
|=||(645.031 / (645.031 + 725.917))||/||(681.795 / (681.795 + 856.403))|
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)|
|=||(5425.214 / 33502.614)||/||(5318.033 / 32782.346)|
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)|
|=||((26.866 + 7573.179) / 18147.778)||/||((27.033 + 7493.986) / 16991.565)|
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|
|=||(3676.744 - 516.128||-||3846.601)||/||18147.778|
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 -2.49 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