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GuruFocus has detected 5 Warning Signs with Autodesk Inc $ADSK.
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Autodesk Inc (NAS:ADSK)
Beneish M-Score
-3.60 (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.

Autodesk Inc has a M-score of -3.60 suggests that the company is not a manipulator.

ADSK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.6   Max: -2.14
Current: -3.6

-3.6
-2.14

During the past 13 years, the highest Beneish M-Score of Autodesk Inc was -2.14. The lowest was -3.60. And the median was -2.92.


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 Autodesk Inc 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 * 0.8532+0.528 * 1.0245+0.404 * 1.0645+0.892 * 0.8111+0.115 * 0.9899
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2373+4.679 * -0.1583-0.327 * 1.2237
=-3.60

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $452 Mil.
Revenue was 478.8 + 489.6 + 550.7 + 511.9 = $2,031 Mil.
Gross Profit was 395.9 + 408.1 + 465.6 + 419.4 = $1,689 Mil.
Total Current Assets was $2,461 Mil.
Total Assets was $4,798 Mil.
Property, Plant and Equipment(Net PPE) was $159 Mil.
Depreciation, Depletion and Amortization(DDA) was $139 Mil.
Selling, General & Admin. Expense(SGA) was $1,314 Mil.
Total Current Liabilities was $2,185 Mil.
Long-Term Debt was $1,092 Mil.
Net Income was -173.4 + -142.8 + -98.2 + -173 = $-587 Mil.
Non Operating Income was 6.1 + 0.3 + -3.9 + 0 = $3 Mil.
Cash Flow from Operations was 15.6 + 7.7 + -18 + 164.4 = $170 Mil.
Accounts Receivable was $654 Mil.
Revenue was 648.3 + 599.8 + 609.5 + 646.5 = $2,504 Mil.
Gross Profit was 553.4 + 508.8 + 516.5 + 554.7 = $2,133 Mil.
Total Current Assets was $2,993 Mil.
Total Assets was $5,515 Mil.
Property, Plant and Equipment(Net PPE) was $169 Mil.
Depreciation, Depletion and Amortization(DDA) was $146 Mil.
Selling, General & Admin. Expense(SGA) was $1,309 Mil.
Total Current Liabilities was $1,591 Mil.
Long-Term Debt was $1,488 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)
=(452.3 / 2031) / (653.6 / 2504.1)
=0.22269818 / 0.26101194
=0.8532

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)
=(2133.4 / 2504.1) / (1689 / 2031)
=0.85196278 / 0.83161004
=1.0245

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 - (2460.6 + 158.6) / 4798.1) / (1 - (2993.1 + 169.3) / 5515.3)
=0.45411725 / 0.42661324
=1.0645

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
=2031 / 2504.1
=0.8111

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))
=(145.8 / (145.8 + 169.3)) / (139.2 / (139.2 + 158.6))
=0.46271025 / 0.4674278
=0.9899

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)
=(1313.5 / 2031) / (1308.9 / 2504.1)
=0.64672575 / 0.52270277
=1.2373

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)
=((1092 + 2185.4) / 4798.1) / ((1487.7 + 1591) / 5515.3)
=0.68306205 / 0.5582108
=1.2237

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
=(-587.4 - 2.5 - 169.7) / 4798.1
=-0.1583

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.

Autodesk Inc has a M-score of -3.60 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.

Autodesk Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1.08660.76821.18411.00781.09311.20070.87020.98031.42890.8532
GMI 0.97520.99931.01950.98761.0030.99971.01991.0181.01391.0244
AQI 0.97441.2821.04760.89861.0721.00170.93111.1941.00741.0645
SGI 1.18051.0660.74021.13891.13521.04360.98341.10480.99680.8111
DEPI 1.03691.00230.8260.94271.05720.9971.05891.03991.03350.9899
SGAI 1.01011.00371.13510.92260.96110.97270.99111.09991.02481.2343
LVGI 1.03341.00120.87041.08460.94731.4050.95261.10341.27881.2237
TATA -0.1552-0.1672-0.0809-0.115-0.0899-0.0723-0.0739-0.1227-0.1372-0.1578
M-score -3.00-3.30-2.89-2.96-2.63-2.72-2.95-2.94-2.81-3.60

Autodesk Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.16440.98030.87451.00780.93141.42890.87870.85550.82130.8532
GMI 1.02081.0181.01631.01521.01361.01391.02171.01831.0191.0245
AQI 1.15731.1941.15710.95460.99291.00740.96731.10661.08631.0645
SGI 1.0611.10481.11771.07051.03540.99680.92330.91020.87310.8111
DEPI 1.04561.03990.99311.00370.97411.03351.06781.06611.06350.9899
SGAI 1.09161.08881.09331.08431.05571.02481.06221.07671.13481.2373
LVGI 1.04481.10341.05291.29481.30861.27881.34721.15241.19271.2237
TATA -0.1076-0.1227-0.1012-0.1447-0.1485-0.1368-0.1968-0.1487-0.1602-0.1583
M-score -2.73-2.94-2.93-3.21-3.32-2.81-3.70-3.39-3.54-3.60
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