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Archer-Daniels Midland Co (NYSE:ADM)
Beneish M-Score
-3.11 (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 -3.11 suggests that the company is not a manipulator.

ADM' s 10-Year Beneish M-Score Range
Min: -3.39   Max: -1.22
Current: -3.11

-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 -2.51.


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 * 0.4784+0.528 * 0.7794+0.404 * 0.9824+0.892 * 1.2862+0.115 * 1.0141
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0107+4.679 * -0.0607-0.327 * 0.99
=-3.11

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,121 Mil.
Revenue was 18117 + 21494 + 20696 + 24143 = $84,450 Mil.
Gross Profit was 1470 + 1172 + 675 + 1170 = $4,487 Mil.
Total Current Assets was $26,639 Mil.
Total Assets was $41,821 Mil.
Property, Plant and Equipment(Net PPE) was $9,995 Mil.
Depreciation, Depletion and Amortization(DDA) was $874 Mil.
Selling, General & Admin. Expense(SGA) was $1,712 Mil.
Total Current Liabilities was $13,751 Mil.
Long-Term Debt was $5,346 Mil.
Net Income was 747 + 533 + 267 + 374 = $1,921 Mil.
Non Operating Income was 77 + 75 + 155 + -630 = $-323 Mil.
Cash Flow from Operations was 3441 + 1341 + -358 + 357 = $4,781 Mil.
Accounts Receivable was $3,447 Mil.
Revenue was 21393 + 22541 + 21727 + 0 = $65,661 Mil.
Gross Profit was 1156 + 807 + 756 + 0 = $2,719 Mil.
Total Current Assets was $26,090 Mil.
Total Assets was $41,448 Mil.
Property, Plant and Equipment(Net PPE) was $10,125 Mil.
Depreciation, Depletion and Amortization(DDA) was $899 Mil.
Selling, General & Admin. Expense(SGA) was $1,317 Mil.
Total Current Liabilities was $13,753 Mil.
Long-Term Debt was $5,364 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)
=(2121 / 84450) / (3447 / 65661)
=0.02511545 / 0.05249692
=0.4784

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)
=(1172 / 65661) / (1470 / 84450)
=0.04140966 / 0.05313203
=0.7794

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 - (26639 + 9995) / 41821) / (1 - (26090 + 10125) / 41448)
=0.1240286 / 0.12625458
=0.9824

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
=84450 / 65661
=1.2862

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))
=(899 / (899 + 10125)) / (874 / (874 + 9995))
=0.08154935 / 0.08041218
=1.0141

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)
=(1712 / 84450) / (1317 / 65661)
=0.02027235 / 0.02005757
=1.0107

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)
=((5346 + 13751) / 41821) / ((5364 + 13753) / 41448)
=0.45663662 / 0.46122853
=0.99

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
=(1921 - -323 - 4781) / 41821
=-0.0607

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 -3.11 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

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Dec13
DSRI 1.03371.0211.07061.19081.13050.64230.93950.60050.64810.9295
GMI 0.94650.87860.83461.1021.33630.93140.94831.16891.29380.9513
AQI 1.01721.02160.97990.81340.76121.10731.10530.85420.94890.97
SGI 1.17730.99421.01821.20281.58610.99130.89131.30791.10361.0086
DEPI 0.91381.02071.03011.05671.13671.02850.94281.12131.06240.9667
SGAI 1.25650.77561.08360.8330.74871.00381.11090.88110.91451.0726
LVGI 1.03180.88331.0041.04611.19840.86650.94381.03020.99870.9477
TATA 0.0076-0.0847-0.0240.02070.1168-0.125-0.03740.0875-0.0517-0.0806
M-score -2.34-2.84-2.62-2.03-1.22-3.35-2.80-2.11-2.80-2.95

Archer-Daniels Midland Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.64810.28021.55571.37921.554910.58340.8750.4784
GMI 1.29381.36421.2351.1490.9340.92420.83620.75370.7794
AQI 0.94890.96891.04751.06011.19651.10151.01851.01780.9824
SGI 1.10361.03690.7420.74210.73821.36821.34081.32771.2862
DEPI 1.06240.99320.9850.98250.979512.15180.97881.00381.0141
SGAI 0.91450.94790.99351.05911.10881.0841.04910.9961.0107
LVGI 0.99871.05520.97650.9070.85630.89130.91180.94070.99
TATA -0.0517-0.0185-0.0708-0.11-0.1488-0.0806-0.0684-0.0478-0.0607
M-score -2.80-3.03-2.38-2.75-2.83-1.22-2.94-2.63-3.11
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