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Archer-Daniels Midland Co (NYSE:ADM)
Beneish M-Score
0.00 (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 -2.92 suggests that the company is not a manipulator.

ADM' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.22
Current: 0

-3.33
-1.22

During the past 13 years, the highest Beneish M-Score of Archer-Daniels Midland Co was -1.22. The lowest was -3.33. And the median was -2.57.


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 * 0.9276+0.528 * 0.7375+0.404 * 1.571+0.892 * 0.9042+0.115 * 0.9991
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.199+4.679 * -0.0733-0.327 * 1.0011
=-2.92

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,704 Mil.
Revenue was 20894 + 18117 + 21494 + 20696 = $81,201 Mil.
Gross Profit was 1451 + 1470 + 1172 + 675 = $4,768 Mil.
Total Current Assets was $26,028 Mil.
Total Assets was $44,027 Mil.
Property, Plant and Equipment(Net PPE) was $9,960 Mil.
Depreciation, Depletion and Amortization(DDA) was $894 Mil.
Selling, General & Admin. Expense(SGA) was $1,907 Mil.
Total Current Liabilities was $15,602 Mil.
Long-Term Debt was $5,558 Mil.
Net Income was 701 + 747 + 533 + 267 = $2,248 Mil.
Non Operating Income was 207 + 77 + 75 + 155 = $514 Mil.
Cash Flow from Operations was 538 + 3441 + 1341 + -358 = $4,962 Mil.
Accounts Receivable was $3,224 Mil.
Revenue was 24143 + 21393 + 22541 + 21727 = $89,804 Mil.
Gross Profit was 1170 + 1156 + 807 + 756 = $3,889 Mil.
Total Current Assets was $28,530 Mil.
Total Assets was $43,752 Mil.
Property, Plant and Equipment(Net PPE) was $10,137 Mil.
Depreciation, Depletion and Amortization(DDA) was $909 Mil.
Selling, General & Admin. Expense(SGA) was $1,759 Mil.
Total Current Liabilities was $15,658 Mil.
Long-Term Debt was $5,347 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)
=(2704 / 81201) / (3224 / 89804)
=0.03330008 / 0.03590041
=0.9276

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)
=(1470 / 89804) / (1451 / 81201)
=0.04330542 / 0.05871849
=0.7375

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 - (26028 + 9960) / 44027) / (1 - (28530 + 10137) / 43752)
=0.1825925 / 0.11622326
=1.571

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
=81201 / 89804
=0.9042

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))
=(909 / (909 + 10137)) / (894 / (894 + 9960))
=0.08229223 / 0.08236595
=0.9991

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)
=(1907 / 81201) / (1759 / 89804)
=0.02348493 / 0.0195871
=1.199

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)
=((5558 + 15602) / 44027) / ((5347 + 15658) / 43752)
=0.48061417 / 0.48009234
=1.0011

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
=(2248 - 514 - 4962) / 44027
=-0.0733

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 -2.92 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 1.02160.97990.81340.76121.10731.10530.85420.94890.971.571
SGI 0.99421.01821.20281.58610.99130.89131.30791.10361.00860.9042
DEPI 1.02071.03011.05671.13671.02850.94281.12131.06240.96670.9991
SGAI 0.77561.08360.8330.74871.00381.11090.88110.91451.07261.199
LVGI 0.88331.0041.04611.19840.86650.94381.03020.99870.94771.0011
TATA -0.0847-0.0240.02070.1168-0.125-0.03740.0875-0.0517-0.0935-0.0733
M-score -2.84-2.62-2.03-1.22-3.35-2.80-2.11-2.80-3.01-2.92

Archer-Daniels Midland Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.28021.55571.37921.554910.58340.8750.47840.9276
GMI 1.36421.2351.1490.9340.92420.83620.75370.77940.7375
AQI 0.96891.04751.06011.19651.10151.01851.01780.98241.571
SGI 1.03690.7420.74210.73821.36821.34081.32771.28620.9042
DEPI 0.99320.60020.60080.601712.15181.60631.64161.6510.9991
SGAI 0.94790.99351.05911.10881.0841.04910.9961.01071.199
LVGI 1.05520.97650.9070.85630.89130.91180.94070.991.0011
TATA -0.0185-0.0786-0.1184-0.1569-0.0935-0.082-0.0619-0.0741-0.0733
M-score -3.03-2.46-2.84-2.91-1.28-2.93-2.62-3.10-2.92
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