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Archer-Daniels Midland Co (NYSE:ADM)
Beneish M-Score
-2.46 (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.

Archer-Daniels Midland Co has a M-score of -2.46 suggests that the company is not a manipulator.

ADM' s 10-Year Beneish M-Score Range
Min: -3.39   Max: -1.22
Current: -2.46

-3.39
-1.22

During the past 13 years, the highest Beneish M-Score of Archer-Daniels Midland Co was -1.22. The lowest was -3.39. And the median was -2.49.


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 Archer-Daniels Midland Co 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 * 1.1008+0.528 * 0.8362+0.404 * 1.0185+0.892 * 1.3408+0.115 * 0.9788
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0491+4.679 * -0.0684-0.327 * 0.9118
=-2.46

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $5,244 Mil.
Revenue was 20696 + 24143 + 21393 + 22541 = $88,773 Mil.
Gross Profit was 675 + 1170 + 1156 + 807 = $3,808 Mil.
Total Current Assets was $26,226 Mil.
Total Assets was $41,444 Mil.
Property, Plant and Equipment(Net PPE) was $10,102 Mil.
Depreciation, Depletion and Amortization(DDA) was $901 Mil.
Selling, General & Admin. Expense(SGA) was $1,716 Mil.
Total Current Liabilities was $13,456 Mil.
Long-Term Debt was $5,353 Mil.
Net Income was 267 + 374 + 476 + 223 = $1,340 Mil.
Non Operating Income was 155 + -607 + 75 + 40 = $-337 Mil.
Cash Flow from Operations was -358 + 357 + 2521 + 1991 = $4,511 Mil.
Accounts Receivable was $3,553 Mil.
Revenue was 21727 + 0 + 21808 + 22675 = $66,210 Mil.
Gross Profit was 756 + 0 + 806 + 813 = $2,375 Mil.
Total Current Assets was $27,865 Mil.
Total Assets was $43,226 Mil.
Property, Plant and Equipment(Net PPE) was $10,122 Mil.
Depreciation, Depletion and Amortization(DDA) was $882 Mil.
Selling, General & Admin. Expense(SGA) was $1,220 Mil.
Total Current Liabilities was $16,142 Mil.
Long-Term Debt was $5,374 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)
=(5244 / 88773) / (3553 / 66210)
=0.05907202 / 0.05366259
=1.1008

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)
=(1170 / 66210) / (675 / 88773)
=0.03587071 / 0.04289593
=0.8362

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 - (26226 + 10102) / 41444) / (1 - (27865 + 10122) / 43226)
=0.12344368 / 0.1212002
=1.0185

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
=88773 / 66210
=1.3408

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))
=(882 / (882 + 10122)) / (901 / (901 + 10102))
=0.08015267 / 0.08188676
=0.9788

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)
=(1716 / 88773) / (1220 / 66210)
=0.0193302 / 0.01842622
=1.0491

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)
=((5353 + 13456) / 41444) / ((5374 + 16142) / 43226)
=0.45384133 / 0.49775598
=0.9118

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
=(1340 - -337 - 4511) / 41444
=-0.0684

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.

Archer-Daniels Midland Co has a M-score of -2.46 suggests that the company will not 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.

Archer-Daniels Midland Co Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Dec12Dec13
DSRI 1.0211.07061.19081.13050.64230.93950.60050.64810.98630.9423
GMI 0.87860.83461.1021.33630.93140.94831.16891.29381.02970.9238
AQI 1.02160.97990.81340.76121.10731.10530.85420.94890.97090.999
SGI 0.99421.01821.20281.58610.99130.89131.30791.10361.01710.9917
DEPI 1.02071.03011.05671.13671.02850.94281.12131.06241.00620.9607
SGAI 0.77561.08360.8330.74871.00381.11090.88110.91451.00681.0653
LVGI 0.88331.0041.04611.19840.86650.94381.03020.99871.02550.9241
TATA -0.0847-0.0240.02070.1168-0.125-0.03740.0875-0.0517-0.0134-0.0806
M-score -2.84-2.62-2.03-1.22-3.35-2.80-2.11-2.80-2.54-2.95

Archer-Daniels Midland Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.37290.24320.64810.28021.55571.37921.55491.1008
GMI 1.20851.26761.29381.36421.2351.1490.9340.8362
AQI 0.95170.97450.94890.96891.04751.06011.19651.0185
SGI 1.28551.21391.10361.03690.7420.74210.73821.3408
DEPI 1.17281.12051.06240.99320.9850.98250.97950.9788
SGAI 0.86680.89750.91450.94790.99351.05911.10881.0491
LVGI 0.88960.88480.99871.05520.97650.9070.85630.9118
TATA -0.0925-0.0938-0.0517-0.0185-0.0708-0.11-0.1483-0.0684
M-score -3.07-3.22-2.80-3.03-2.38-2.75-2.83-2.46
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