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Advent Software Inc (NAS:ADVS)
Beneish M-Score
-3.81 (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 -3.81 suggests that the company is not a manipulator.

ADVS' s 10-Year Beneish M-Score Range
Min: -4.08   Max: 0.99
Current: -3.81

-4.08
0.99

During the past 13 years, the highest Beneish M-Score of Advent Software Inc was 0.99. The lowest was -4.08. And the median was -2.89.


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 * 0.8327+0.528 * 0.9626+0.404 * 1.1773+0.892 * 1.0628+0.115 * 0.9921
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.148+4.679 * -0.165-0.327 * 2.4736
=-3.81

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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.
Net Income was 10.886 + 10.999 + 9.813 + -4.045 = $27.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 20.875 + 36.663 + 22.835 + 21.876 = $102.2 Mil.
Accounts Receivable was $55.5 Mil.
Revenue was 92.49 + 92.017 + 90.174 + 89.724 = $364.4 Mil.
Gross Profit was 64.011 + 62.578 + 57.361 + 58.395 = $242.3 Mil.
Total Current Assets was $285.9 Mil.
Total Assets was $658.1 Mil.
Property, Plant and Equipment(Net PPE) was $35.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.9 Mil.
Selling, General & Admin. Expense(SGA) was $111.9 Mil.
Total Current Liabilities was $219.8 Mil.
Long-Term Debt was $82.5 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)
=(49.097 / 387.273) / (55.481 / 364.405)
=0.1267762 / 0.15225093
=0.8327

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)
=(68.524 / 364.405) / (68.322 / 387.273)
=0.66504302 / 0.69085374
=0.9626

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 - (148.153 + 31.417) / 452.214) / (1 - (285.932 + 35.156) / 658.115)
=0.60290924 / 0.51210959
=1.1773

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
=387.273 / 364.405
=1.0628

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))
=(25.902 / (25.902 + 35.156)) / (23.468 / (23.468 + 31.417))
=0.42421959 / 0.42758495
=0.9921

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)
=(136.525 / 387.273) / (111.9 / 364.405)
=0.35252909 / 0.30707592
=1.148

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)
=((275 + 238.856) / 452.214) / ((82.5 + 219.825) / 658.115)
=1.13631157 / 0.4593802
=2.4736

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
=(27.653 - 0 - 102.249) / 452.214
=-0.165

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 -3.81 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.57040.90891.13050.98410.88590.8711.03361.08060.89380.9009
GMI 0.90310.93361.01820.9941.04150.9640.98291.05051.00370.9573
AQI 0.94010.94161.69930.96491.06180.93060.7921.19891.0091.1556
SGI 1.09351.12471.09121.16951.10491.09091.09251.15081.09981.0673
DEPI 0.90211.10671.53531.10881.1750.74111.10690.85440.85050.9424
SGAI 0.88171.00451.02870.92820.94120.96570.98960.90950.91411.1149
LVGI 1.38221.1881.27571.25061.13780.79850.98931.1961.03842.4481
TATA -0.1216-0.07690.0941-0.1537-0.1316-0.082-0.1053-0.0877-0.0854-0.1529
M-score -2.63-2.92-1.58-3.14-3.08-2.91-2.93-2.64-2.90-3.69

Advent Software Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.08061.02530.87190.8480.89380.86420.91470.98470.90090.8327
GMI 1.05051.05681.04511.02751.00370.98570.970.95790.95730.9626
AQI 1.19891.04590.88170.82791.0090.99880.66851.18441.15561.1773
SGI 1.15081.15641.1471.11911.09981.07871.06711.06881.06731.0628
DEPI 0.85440.81780.79840.83490.85050.87730.8870.88870.94240.9921
SGAI 0.90950.90470.91980.91650.91410.92051.05751.0881.11491.148
LVGI 1.1961.20251.16391.06711.03841.02392.4972.82622.44812.4736
TATA -0.0877-0.0949-0.0882-0.0894-0.0854-0.0837-0.0891-0.1516-0.1529-0.165
M-score -2.64-2.78-2.97-3.01-2.90-2.94-3.58-3.71-3.69-3.81
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