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Advent Software Inc (NAS:ADVS)
Beneish M-Score
-3.12 (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 -3.12 suggests that the company is not a manipulator.

ADVS' s 10-Year Beneish M-Score Range
Min: -3.93   Max: 0.99
Current: -3.12

-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 -2.90.


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 * 0.9362+0.528 * 0.9707+0.404 * 1.0025+0.892 * 1.0433+0.115 * 1.033
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.865+4.679 * -0.1426-0.327 * 0.9052
=-3.12

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $55.3 Mil.
Revenue was 98.982 + 100.37 + 96.804 + 97.579 = $393.7 Mil.
Gross Profit was 69.098 + 70.579 + 68.322 + 68.524 = $276.5 Mil.
Total Current Assets was $141.6 Mil.
Total Assets was $432.9 Mil.
Property, Plant and Equipment(Net PPE) was $28.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.6 Mil.
Selling, General & Admin. Expense(SGA) was $118.7 Mil.
Total Current Liabilities was $248.5 Mil.
Long-Term Debt was $235.0 Mil.
Net Income was 11.983 + 12.639 + 10.886 + 10.999 = $46.5 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 28.263 + 22.439 + 20.875 + 36.663 = $108.2 Mil.
Accounts Receivable was $56.6 Mil.
Revenue was 96.767 + 96.123 + 92.49 + 92.017 = $377.4 Mil.
Gross Profit was 64.976 + 65.727 + 64.011 + 62.578 = $257.3 Mil.
Total Current Assets was $147.8 Mil.
Total Assets was $454.9 Mil.
Property, Plant and Equipment(Net PPE) was $31.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.4 Mil.
Selling, General & Admin. Expense(SGA) was $131.6 Mil.
Total Current Liabilities was $231.3 Mil.
Long-Term Debt was $330.0 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)
=(55.28 / 393.735) / (56.597 / 377.397)
=0.140399 / 0.14996675
=0.9362

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)
=(70.579 / 377.397) / (69.098 / 393.735)
=0.68175423 / 0.70230739
=0.9707

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 - (141.593 + 28.502) / 432.882) / (1 - (147.828 + 31.602) / 454.896)
=0.60706382 / 0.60555819
=1.0025

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
=393.735 / 377.397
=1.0433

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))
=(25.41 / (25.41 + 31.602)) / (21.628 / (21.628 + 28.502))
=0.44569564 / 0.43143826
=1.033

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)
=(118.743 / 393.735) / (131.572 / 377.397)
=0.30158101 / 0.34863022
=0.865

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)
=((235 + 248.464) / 432.882) / ((330 + 231.261) / 454.896)
=1.1168494 / 1.23382268
=0.9052

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
=(46.507 - 0 - 108.24) / 432.882
=-0.1426

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 -3.12 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 1.71790.90891.13050.98410.88590.8711.03361.08060.89380.9009
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 -0.1216-0.07690.0941-0.1537-0.1316-0.082-0.1044-0.0867-0.0845-0.1529
M-score -2.50-2.92-1.58-3.14-3.08-2.91-2.93-2.64-2.89-3.69

Advent Software Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87190.8480.89380.86420.91470.98470.90090.83270.99520.9362
GMI 1.04511.02751.00370.98570.970.95790.95730.96260.96780.9707
AQI 0.88170.82791.0090.99880.66851.18441.15561.17731.7051.0025
SGI 1.1471.11911.09981.07871.06711.06881.06731.06281.05591.0433
DEPI 0.79840.83490.85050.87730.8870.88870.94240.99211.0531.033
SGAI 0.91980.91650.91410.92051.05751.0881.11491.1480.87970.865
LVGI 1.16391.06711.03841.02392.4972.82622.44812.47361.02130.9052
TATA -0.0867-0.0873-0.0845-0.083-0.0889-0.1517-0.1529-0.165-0.1293-0.1426
M-score -2.96-3.00-2.89-2.94-3.58-3.72-3.69-3.81-2.75-3.12
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