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Archer-Daniels Midland Co (NYSE:ADM)
Beneish M-Score
-3.30 (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 -3.30 suggests that the company is not a manipulator.

ADM' s 10-Year Beneish M-Score Range
Min: -3.39   Max: -1.21
Current: -3.3

-3.39
-1.21

During the past 13 years, the highest Beneish M-Score of Archer-Daniels Midland Co was -1.21. The lowest was -3.39. And the median was -2.56.


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 * 0.6474+0.528 * 0.703+0.404 * 1.5412+0.892 * 0.8402+0.115 * 0.9647
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4825+4.679 * -0.065-0.327 * 1.0735
=-3.30

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $2,224 Mil.
Revenue was 17186 + 17506 + 20894 + 18117 = $73,703 Mil.
Gross Profit was 964 + 1102 + 1451 + 1470 = $4,987 Mil.
Total Current Assets was $22,588 Mil.
Total Assets was $40,568 Mil.
Property, Plant and Equipment(Net PPE) was $9,897 Mil.
Depreciation, Depletion and Amortization(DDA) was $903 Mil.
Selling, General & Admin. Expense(SGA) was $2,105 Mil.
Total Current Liabilities was $12,859 Mil.
Long-Term Debt was $5,965 Mil.
Net Income was 386 + 493 + 701 + 747 = $2,327 Mil.
Non Operating Income was 145 + 149 + 207 + 77 = $578 Mil.
Cash Flow from Operations was 362 + 45 + 538 + 3441 = $4,386 Mil.
Accounts Receivable was $4,089 Mil.
Revenue was 21494 + 20696 + 24143 + 21393 = $87,726 Mil.
Gross Profit was 1172 + 675 + 1170 + 1156 = $4,173 Mil.
Total Current Assets was $24,658 Mil.
Total Assets was $39,930 Mil.
Property, Plant and Equipment(Net PPE) was $10,110 Mil.
Depreciation, Depletion and Amortization(DDA) was $887 Mil.
Selling, General & Admin. Expense(SGA) was $1,690 Mil.
Total Current Liabilities was $11,891 Mil.
Long-Term Debt was $5,369 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)
=(2224 / 73703) / (4089 / 87726)
=0.03017516 / 0.04661104
=0.6474

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)
=(1102 / 87726) / (964 / 73703)
=0.04756857 / 0.06766346
=0.703

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 - (22588 + 9897) / 40568) / (1 - (24658 + 10110) / 39930)
=0.19924571 / 0.12927623
=1.5412

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
=73703 / 87726
=0.8402

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))
=(887 / (887 + 10110)) / (903 / (903 + 9897))
=0.08065836 / 0.08361111
=0.9647

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)
=(2105 / 73703) / (1690 / 87726)
=0.02856057 / 0.01926453
=1.4825

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)
=((5965 + 12859) / 40568) / ((5369 + 11891) / 39930)
=0.46401104 / 0.43225645
=1.0735

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
=(2327 - 578 - 4386) / 40568
=-0.065

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 -3.30 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

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Dec13Dec14
DSRI 1.0211.07061.19081.13050.64230.93950.60050.64810.92950.9276
GMI 0.87860.83461.1021.33630.93140.94831.16891.29380.95130.7375
AQI 1.02160.97990.81340.76121.10791.11370.82510.93671.00891.571
SGI 0.99421.01821.20281.58610.99130.89131.30791.10361.00860.9042
DEPI 1.02071.03011.05671.13671.09270.88751.12131.06240.96670.9991
SGAI 0.77561.08360.8330.74871.00381.11090.88110.91451.07261.199
LVGI 0.88331.0041.04611.19840.87740.92421.04291.00010.94271.0011
TATA -0.0847-0.0240.02070.1168-0.1241-0.04170.0878-0.052-0.0994-0.0733
M-score -2.84-2.62-2.03-1.22-3.34-2.82-2.12-2.80-3.02-2.92

Archer-Daniels Midland Co Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.55571.37921.554910.58340.8750.47840.92760.83370.6474
GMI 1.2351.1490.9340.92420.83620.75370.77940.73750.64410.703
AQI 1.04751.10261.19651.10151.01851.01780.98241.5711.55081.5412
SGI 0.7420.74210.73821.36821.34081.32771.28620.90420.87880.8402
DEPI 0.9850.98250.979512.15180.97881.00381.01410.99910.98560.9647
SGAI 0.99351.05911.10881.0841.04910.9961.01071.1991.33421.4825
LVGI 0.97650.90230.85630.89130.91180.94070.991.00111.04641.0735
TATA -0.0708-0.11-0.1483-0.0994-0.0882-0.0684-0.0809-0.0733-0.0815-0.065
M-score -2.38-2.74-2.83-1.31-3.03-2.73-3.20-2.92-3.16-3.30
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