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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.
Accenture PLC has a M-score of -2.26 suggests that the company is not a 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 -2.78.
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 * 1.092||+||0.528 * 1.0019||+||0.404 * 1.3544||+||0.892 * 1.0323||+||0.115 * 0.9985|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9905||+||4.679 * -0.0092||-||0.327 * 0.9734|
|This Year (May14) TTM:||Last Year (May13) TTM:|
|Accounts Receivable was $3,805 Mil.|
Revenue was 8240.18 + 7567.483 + 7799.696 + 7524.994 = $31,132 Mil.
Gross Profit was 2536.357 + 2230.142 + 2449.347 + 2349.6 = $9,565 Mil.
Total Current Assets was $11,135 Mil.
Total Assets was $17,002 Mil.
Property, Plant and Equipment(Net PPE) was $787 Mil.
Depreciation, Depletion and Amortization(DDA) was $610 Mil.
Selling, General & Admin. Expense(SGA) was $5,378 Mil.
Total Current Liabilities was $7,616 Mil.
Long-Term Debt was $27 Mil.
Net Income was 817.336 + 671.3 + 751.846 + 671 = $2,911 Mil.
Non Operating Income was -6.051 + -4.766 + -10.62 + -23.358 = $-45 Mil.
Cash Flow from Operations was 1363.26 + 292.38 + 181.233 + 1275.51 = $3,112 Mil.
|Accounts Receivable was $3,375 Mil.
Revenue was 7707.935 + 7493.32 + 7668.036 + 7288.259 = $30,158 Mil.
Gross Profit was 2438.019 + 2230.363 + 2366.193 + 2248.89 = $9,283 Mil.
Total Current Assets was $12,079 Mil.
Total Assets was $16,524 Mil.
Property, Plant and Equipment(Net PPE) was $799 Mil.
Depreciation, Depletion and Amortization(DDA) was $618 Mil.
Selling, General & Admin. Expense(SGA) was $5,260 Mil.
Total Current Liabilities was $7,631 Mil.
Long-Term Debt was $0 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)|
|=||(3804.826 / 31132.353)||/||(3375.047 / 30157.55)|
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)|
|=||(2230.142 / 30157.55)||/||(2536.357 / 31132.353)|
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 - (11134.693 + 786.599) / 17002.384)||/||(1 - (12078.919 + 798.915) / 16523.758)|
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))|
|=||(618.23 / (618.23 + 798.915))||/||(610.371 / (610.371 + 786.599))|
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)|
|=||(5378.327 / 31132.353)||/||(5260.031 / 30157.55)|
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)|
|=||((26.534 + 7616.168) / 17002.384)||/||((0 + 7630.622) / 16523.758)|
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|
|=||(2911.482 - -44.795||-||3112.383)||/||17002.384|
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 -2.26 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