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Archer-Daniels Midland Co (NYSE:ADM)
Beneish M-Score
-2.44 (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 -2.44 suggests that the company is not a manipulator.

ADM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.36   Max: -1.22
Current: -2.44

-3.36
-1.22

During the past 13 years, the highest Beneish M-Score of Archer-Daniels Midland Co was -1.22. The lowest was -3.36. And the median was -2.52.


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 * 1.224+0.528 * 1.1287+0.404 * 1.2229+0.892 * 0.8633+0.115 * 0.9997
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0904+4.679 * -0.0395-0.327 * 0.9934
=-2.44

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $2,253 Mil.
Revenue was 15832 + 15629 + 14384 + 16445 = $62,290 Mil.
Gross Profit was 1105 + 757 + 796 + 865 = $3,523 Mil.
Total Current Assets was $20,543 Mil.
Total Assets was $39,853 Mil.
Property, Plant and Equipment(Net PPE) was $9,853 Mil.
Depreciation, Depletion and Amortization(DDA) was $902 Mil.
Selling, General & Admin. Expense(SGA) was $2,038 Mil.
Total Current Liabilities was $12,737 Mil.
Long-Term Debt was $6,594 Mil.
Net Income was 341 + 284 + 230 + 718 = $1,573 Mil.
Non Operating Income was -9 + 212 + 33 + 372 = $608 Mil.
Cash Flow from Operations was 1522 + -389 + 23 + 1383 = $2,539 Mil.
Accounts Receivable was $2,132 Mil.
Revenue was 16565 + 17186 + 17506 + 20894 = $72,151 Mil.
Gross Profit was 1089 + 964 + 1102 + 1451 = $4,606 Mil.
Total Current Assets was $23,045 Mil.
Total Assets was $40,877 Mil.
Property, Plant and Equipment(Net PPE) was $9,900 Mil.
Depreciation, Depletion and Amortization(DDA) was $906 Mil.
Selling, General & Admin. Expense(SGA) was $2,165 Mil.
Total Current Liabilities was $14,130 Mil.
Long-Term Debt was $5,829 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)
=(2253 / 62290) / (2132 / 72151)
=0.03616953 / 0.02954914
=1.224

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)
=(4606 / 72151) / (3523 / 62290)
=0.06383834 / 0.05655803
=1.1287

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 - (20543 + 9853) / 39853) / (1 - (23045 + 9900) / 40877)
=0.23729707 / 0.19404555
=1.2229

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
=62290 / 72151
=0.8633

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))
=(906 / (906 + 9900)) / (902 / (902 + 9853))
=0.08384231 / 0.08386797
=0.9997

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)
=(2038 / 62290) / (2165 / 72151)
=0.03271793 / 0.03000651
=1.0904

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)
=((6594 + 12737) / 39853) / ((5829 + 14130) / 40877)
=0.48505759 / 0.48826969
=0.9934

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
=(1573 - 608 - 2539) / 39853
=-0.0395

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 -2.44 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 local exchange's currency.

Archer-Daniels Midland Co Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Dec13Dec14Dec15
DSRI 1.07061.19081.13050.64230.93950.60050.64810.92950.92760.7709
GMI 0.83461.1021.33630.93140.94831.16891.29380.95130.73750.9889
AQI 0.97990.81340.76121.10791.11370.82510.93671.00891.5711.1558
SGI 1.01821.20281.58610.99130.89131.30791.10361.00860.90420.8338
DEPI 1.03011.05671.13671.09270.88751.12131.06240.96670.99911.0025
SGAI 1.08360.8330.74871.00381.11090.88110.91451.07261.1991.2642
LVGI 1.0041.04611.19840.87740.92421.04291.00010.94271.00110.9992
TATA -0.0240.02080.1168-0.1241-0.04170.0878-0.052-0.0994-0.0733-0.0285
M-score -2.62-2.03-1.22-3.34-2.82-2.12-2.80-3.02-2.92-2.96

Archer-Daniels Midland Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.2050.660.83370.64741.17650.77091.16581.18681.224
GMI 0.77740.77190.64410.7030.83230.98891.15791.2161.1287
AQI 1.01780.98241.55081.54121.56451.15581.1611.18021.2229
SGI 0.96410.93230.87880.84020.85440.83380.82780.85510.8633
DEPI 1.00381.01410.98560.96470.95911.00250.99921.00140.9997
SGAI 0.99771.02241.33421.48251.48021.26421.1931.10451.0904
LVGI 0.94070.991.04641.07351.06930.99920.99331.03940.9934
TATA -0.0684-0.0809-0.0815-0.065-0.0037-0.0285-0.032-0.0171-0.0395
M-score -2.73-3.36-3.16-3.30-2.44-2.96-2.51-2.36-2.44
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