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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.
AGCO Corp has a M-score of -2.46 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of AGCO Corp was -1.95. The lowest was -3.61. And the median was -2.53.
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 AGCO Corp 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 * 0.9618||+||0.528 * 0.9834||+||0.404 * 0.9829||+||0.892 * 0.9971||+||0.115 * 1.0164|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0028||+||4.679 * 0.0125||-||0.327 * 0.9515|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $1,233 Mil.|
Revenue was 2750.3 + 2333.4 + 2859.7 + 2475.9 = $10,419 Mil.
Gross Profit was 631.5 + 514.9 + 591 + 556.2 = $2,294 Mil.
Total Current Assets was $4,534 Mil.
Total Assets was $8,469 Mil.
Property, Plant and Equipment(Net PPE) was $1,604 Mil.
Depreciation, Depletion and Amortization(DDA) was $273 Mil.
Selling, General & Admin. Expense(SGA) was $1,083 Mil.
Total Current Liabilities was $2,791 Mil.
Long-Term Debt was $979 Mil.
Net Income was 168.2 + 99.6 + 139.3 + 126.2 = $533 Mil.
Non Operating Income was -12.9 + -11.2 + -14.9 + -11.3 = $-50 Mil.
Cash Flow from Operations was 256.8 + -511 + 628 + 104 = $478 Mil.
|Accounts Receivable was $1,286 Mil.
Revenue was 3048.2 + 2403.1 + 2703.4 + 2295 = $10,450 Mil.
Gross Profit was 710.3 + 533.1 + 527.8 + 491 = $2,262 Mil.
Total Current Assets was $4,517 Mil.
Total Assets was $8,235 Mil.
Property, Plant and Equipment(Net PPE) was $1,411 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $1,083 Mil.
Total Current Liabilities was $2,775 Mil.
Long-Term Debt was $1,078 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1233.4 / 10419.3)||/||(1286.1 / 10449.7)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(514.9 / 10449.7)||/||(631.5 / 10419.3)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (4533.6 + 1603.5) / 8469.3)||/||(1 - (4517 + 1410.9) / 8235)|
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.
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))|
|=||(245 / (245 + 1410.9))||/||(273.2 / (273.2 + 1603.5))|
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)|
|=||(1082.6 / 10419.3)||/||(1082.7 / 10449.7)|
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)|
|=||((979.2 + 2790.7) / 8469.3)||/||((1077.5 + 2775.1) / 8235)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(533.3 - -50.3||-||477.8)||/||8469.3|
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.
AGCO Corp has a M-score of -2.46 suggests that the company will not be a manipulator.
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
AGCO Corp Annual Data
AGCO Corp Quarterly Data