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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 -2.81.
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 * 1.0543||+||0.528 * 1.0131||+||0.404 * 1.2109||+||0.892 * 1.0191||+||0.115 * 1.0289|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9787||+||4.679 * -0.0418||-||0.327 * 1.0199|
|This Year (Nov15) TTM:||Last Year (Nov14) TTM:|
|Accounts Receivable was $4,061 Mil.|
Revenue was 8465.984 + 8364.511 + 8275.066 + 7931.59 = $33,037 Mil.
Gross Profit was 2562.519 + 2504.405 + 2524.905 + 2240.639 = $9,832 Mil.
Total Current Assets was $10,623 Mil.
Total Assets was $17,994 Mil.
Property, Plant and Equipment(Net PPE) was $804 Mil.
Depreciation, Depletion and Amortization(DDA) was $661 Mil.
Selling, General & Admin. Expense(SGA) was $5,363 Mil.
Total Current Liabilities was $8,472 Mil.
Long-Term Debt was $26 Mil.
Net Income was 818.899 + 737.628 + 793.697 + 690.726 = $3,041 Mil.
Non Operating Income was 4.029 + -16.426 + -3.839 + -21.508 = $-38 Mil.
Cash Flow from Operations was 611.305 + 1504.586 + 1413.364 + 301.287 = $3,831 Mil.
|Accounts Receivable was $3,780 Mil.
Revenue was 8343.257 + 8267.319 + 8240.18 + 7567.483 = $32,418 Mil.
Gross Profit was 2539.29 + 2468.62 + 2536.357 + 2230.142 = $9,774 Mil.
Total Current Assets was $11,576 Mil.
Total Assets was $17,630 Mil.
Property, Plant and Equipment(Net PPE) was $740 Mil.
Depreciation, Depletion and Amortization(DDA) was $642 Mil.
Selling, General & Admin. Expense(SGA) was $5,377 Mil.
Total Current Liabilities was $8,137 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)|
|=||(4061.037 / 33037.151)||/||(3779.792 / 32418.239)|
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)|
|=||(2504.405 / 32418.239)||/||(2562.519 / 33037.151)|
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 - (10623.048 + 804.012) / 17993.875)||/||(1 - (11576.245 + 740.496) / 17630.033)|
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))|
|=||(641.935 / (641.935 + 740.496))||/||(661.286 / (661.286 + 804.012))|
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)|
|=||(5363.048 / 33037.151)||/||(5377.287 / 32418.239)|
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)|
|=||((25.807 + 8472.398) / 17993.875)||/||((26.786 + 8137.403) / 17630.033)|
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|
|=||(3040.95 - -37.744||-||3830.542)||/||17993.875|
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 -2.52 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