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Adtran Inc (NAS:ADTN)
Beneish M-Score
-2.33 (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.

Adtran Inc has a M-score of -2.33 suggests that the company is not a manipulator.

ADTN' s Beneish M-Score Range Over the Past 10 Years
Min: -14529.48   Max: 14881.24
Current: -2.33

-14529.48
14881.24

During the past 13 years, the highest Beneish M-Score of Adtran Inc was 14881.24. The lowest was -14529.48. And the median was -2.58.


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 Adtran 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 * 1.1666+0.528 * 0.9769+0.404 * 0.9035+0.892 * 1.0129+0.115 * 1.0981
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0087+4.679 * 0.0025-0.327 * 0.9438
=-2.33

* 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 $101.8 Mil.
Revenue was 168.89 + 162.701 + 142.204 + 139.013 = $612.8 Mil.
Gross Profit was 75.808 + 78.955 + 65.794 + 62.439 = $283.0 Mil.
Total Current Assets was $364.8 Mil.
Total Assets was $655.6 Mil.
Property, Plant and Equipment(Net PPE) was $78.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.7 Mil.
Selling, General & Admin. Expense(SGA) was $127.7 Mil.
Total Current Liabilities was $115.6 Mil.
Long-Term Debt was $27.9 Mil.
Net Income was 12.415 + 10.228 + 5.014 + 5.718 = $33.4 Mil.
Non Operating Income was 4.62 + 0.859 + 1.847 + 1.29 = $8.6 Mil.
Cash Flow from Operations was 7.215 + 4.941 + 15.676 + -4.722 = $23.1 Mil.
Accounts Receivable was $86.2 Mil.
Revenue was 158.078 + 160.138 + 142.835 + 143.982 = $605.0 Mil.
Gross Profit was 70.649 + 68.246 + 65.563 + 68.483 = $272.9 Mil.
Total Current Assets was $357.0 Mil.
Total Assets was $671.9 Mil.
Property, Plant and Equipment(Net PPE) was $73.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.5 Mil.
Selling, General & Admin. Expense(SGA) was $125.0 Mil.
Total Current Liabilities was $127.0 Mil.
Long-Term Debt was $28.8 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)
=(101.822 / 612.808) / (86.176 / 605.033)
=0.16615645 / 0.1424319
=1.1666

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)
=(272.941 / 605.033) / (282.996 / 612.808)
=0.45111754 / 0.46180207
=0.9769

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 - (364.803 + 78.078) / 655.563) / (1 - (356.959 + 73.656) / 671.854)
=0.32442649 / 0.35906462
=0.9035

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
=612.808 / 605.033
=1.0129

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))
=(14.483 / (14.483 + 73.656)) / (13.74 / (13.74 + 78.078))
=0.16431999 / 0.14964386
=1.0981

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)
=(127.706 / 612.808) / (124.996 / 605.033)
=0.2083948 / 0.20659369
=1.0087

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)
=((27.9 + 115.621) / 655.563) / ((28.8 + 127.048) / 671.854)
=0.21892785 / 0.23196706
=0.9438

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
=(33.375 - 8.616 - 23.11) / 655.563
=0.0025

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.

Adtran Inc has a M-score of -2.33 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.

Adtran Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.93041.23420.71081.33390.83290.90681.20951.04161.05050.8532
GMI 1.00150.99430.99421.00731.00031.02571.13221.060.9741.111
AQI 1.34130.64451.34950.94921.30581.12930.94881.03651.00280.8541
SGI 0.92111.00861.05010.96711.25091.18420.86531.0340.98170.9525
DEPI 1.12960.82551.24380.96950.95780.94160.88760.93230.96711.0166
SGAI 1.16020.99430.95190.99560.9220.91941.24490.931.0390.9829
LVGI 1.17531.04870.97650.90690.83230.94171.29231.09681.06430.9518
TATA -0.0299-0.0309-0.075-0.02620.0159-0.0289-0.0567-0.0274-0.0266-0.0139
M-score -2.69-2.58-2.87-2.31-2.15-2.44-2.77-2.52-2.62-2.70

Adtran Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.02730.88731.05050.93270.8340.9250.85320.77551.01641.1666
GMI 0.99540.97070.9741.02721.06771.09861.1111.07240.99680.9769
AQI 1.12331.11591.00280.85060.80260.82490.85411.01110.96880.9035
SGI 1.08651.03650.98170.96920.92450.93790.95250.95780.98711.0129
DEPI 0.98040.97340.96710.95460.98360.9971.01661.06191.06761.0981
SGAI 0.95621.011.0391.00371.030.99870.98290.9970.98591.0087
LVGI 1.02010.941.06431.13951.2021.18480.95180.86790.84350.9438
TATA -0.0126-0.0132-0.0266-0.0397-0.0531-0.0391-0.0139-0.01420.00620.0025
M-score -2.39-2.57-2.62-2.85-3.07-2.87-2.70-2.70-2.40-2.33
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