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Advent Software Inc (NAS:ADVS)
Beneish M-Score
-2.85 (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.

Advent Software Inc has a M-score of -2.85 suggests that the company is not a manipulator.

ADVS' s 10-Year Beneish M-Score Range
Min: -3.93   Max: 0.99
Current: -2.85

-3.93
0.99

During the past 13 years, the highest Beneish M-Score of Advent Software Inc was 0.99. The lowest was -3.93. And the median was -2.91.


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 Advent Software 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 * 1.2224+0.528 * 0.9819+0.404 * 0.9644+0.892 * 1.0413+0.115 * 0.9291
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8953+4.679 * -0.133-0.327 * 0.9271
=-2.85

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $62.5 Mil.
Revenue was 103.264 + 100.664 + 98.982 + 100.37 = $403.3 Mil.
Gross Profit was 72.762 + 71.3 + 69.098 + 70.579 = $283.7 Mil.
Total Current Assets was $151.7 Mil.
Total Assets was $424.8 Mil.
Property, Plant and Equipment(Net PPE) was $26.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.2 Mil.
Selling, General & Admin. Expense(SGA) was $127.3 Mil.
Total Current Liabilities was $262.5 Mil.
Long-Term Debt was $185.0 Mil.
Net Income was 5.048 + 14.704 + 11.983 + 12.639 = $44.4 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 6.611 + 43.581 + 28.263 + 22.439 = $100.9 Mil.
Accounts Receivable was $49.1 Mil.
Revenue was 96.804 + 97.579 + 96.767 + 96.123 = $387.3 Mil.
Gross Profit was 68.322 + 68.524 + 64.976 + 65.727 = $267.5 Mil.
Total Current Assets was $148.2 Mil.
Total Assets was $452.2 Mil.
Property, Plant and Equipment(Net PPE) was $31.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.5 Mil.
Selling, General & Admin. Expense(SGA) was $136.5 Mil.
Total Current Liabilities was $238.9 Mil.
Long-Term Debt was $275.0 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)
=(62.495 / 403.28) / (49.097 / 387.273)
=0.15496677 / 0.1267762
=1.2224

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)
=(71.3 / 387.273) / (72.762 / 403.28)
=0.69085374 / 0.70357816
=0.9819

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 - (151.731 + 26.07) / 424.826) / (1 - (148.153 + 31.417) / 452.214)
=0.58147336 / 0.60290924
=0.9644

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
=403.28 / 387.273
=1.0413

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))
=(23.468 / (23.468 + 31.417)) / (22.225 / (22.225 + 26.07))
=0.42758495 / 0.46019257
=0.9291

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)
=(127.285 / 403.28) / (136.525 / 387.273)
=0.31562438 / 0.35252909
=0.8953

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)
=((185 + 262.532) / 424.826) / ((275 + 238.856) / 452.214)
=1.05344776 / 1.13631157
=0.9271

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
=(44.374 - 0 - 100.894) / 424.826
=-0.133

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.

Advent Software Inc has a M-score of -2.85 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.

Advent Software Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.90891.13050.98410.88590.8711.03361.08060.89380.90091.0169
GMI 0.93361.01820.9941.04150.9640.98291.05051.00370.95730.9766
AQI 0.94161.69930.96491.06180.93060.7921.19891.0091.15560.9687
SGI 1.12471.09121.16951.10491.09091.09251.15081.09981.06731.0362
DEPI 1.10671.53531.10881.1750.74111.10690.85440.85050.94241.0091
SGAI 1.00451.02870.92820.94120.96570.98960.90950.91411.11490.8511
LVGI 1.1881.27571.25061.13780.79850.98931.1961.03842.44810.9217
TATA -0.07690.0941-0.1537-0.1316-0.082-0.1053-0.0877-0.0854-0.1529-0.1493
M-score -2.92-1.58-3.14-3.08-2.91-2.93-2.64-2.90-3.69-3.10

Advent Software Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.89380.86420.91470.98470.90090.83270.99520.93621.01691.2224
GMI 1.00370.98570.970.95790.95730.96260.96780.97070.97660.9819
AQI 1.0090.99880.66851.18441.15561.17731.7051.00250.96870.9644
SGI 1.09981.07871.06711.06881.06731.06281.05591.04331.03621.0413
DEPI 0.85050.87730.8870.88870.94240.99211.0531.0331.00910.9291
SGAI 0.91410.92051.05751.0881.11491.1480.87970.8650.85110.8953
LVGI 1.03841.02392.4972.82622.44812.47361.02130.90520.92170.9271
TATA -0.0854-0.0837-0.0891-0.1516-0.1529-0.165-0.1293-0.1426-0.1493-0.133
M-score -2.90-2.94-3.58-3.71-3.69-3.81-2.75-3.12-3.10-2.85
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