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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 -2.39 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of AGCO Corp was -2.02. The lowest was -3.62. 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 * 1.016||+||0.528 * 0.9684||+||0.404 * 0.9572||+||0.892 * 1.062||+||0.115 * 1.0203|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9883||+||4.679 * 0.0095||-||0.327 * 0.9772|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,211 Mil.|
Revenue was 2333.4 + 2859.7 + 2475.9 + 3048.2 = $10,717 Mil.
Gross Profit was 514.9 + 591 + 556.2 + 710.3 = $2,372 Mil.
Total Current Assets was $4,397 Mil.
Total Assets was $8,320 Mil.
Property, Plant and Equipment(Net PPE) was $1,603 Mil.
Depreciation, Depletion and Amortization(DDA) was $266 Mil.
Selling, General & Admin. Expense(SGA) was $1,536 Mil.
Total Current Liabilities was $2,786 Mil.
Long-Term Debt was $1,014 Mil.
Net Income was 99.6 + 139.3 + 126.2 + 213.7 = $579 Mil.
Non Operating Income was -11.2 + -14.9 + -11.3 + -10.2 = $-48 Mil.
Cash Flow from Operations was -511 + 628 + 104 + 326.3 = $547 Mil.
|Accounts Receivable was $1,123 Mil.
Revenue was 2403.1 + 2703.4 + 2295 + 2690.1 = $10,092 Mil.
Gross Profit was 533.1 + 527.8 + 491 + 611.4 = $2,163 Mil.
Total Current Assets was $4,272 Mil.
Total Assets was $7,992 Mil.
Property, Plant and Equipment(Net PPE) was $1,391 Mil.
Depreciation, Depletion and Amortization(DDA) was $237 Mil.
Selling, General & Admin. Expense(SGA) was $1,463 Mil.
Total Current Liabilities was $2,581 Mil.
Long-Term Debt was $1,155 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)|
|=||(1211.3 / 10717.2)||/||(1122.6 / 10091.6)|
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)|
|=||(591 / 10091.6)||/||(514.9 / 10717.2)|
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 - (4396.9 + 1603) / 8319.7)||/||(1 - (4272.3 + 1391.2) / 7991.5)|
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))|
|=||(236.7 / (236.7 + 1391.2))||/||(266.4 / (266.4 + 1603))|
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)|
|=||(1535.6 / 10717.2)||/||(1463.1 / 10091.6)|
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)|
|=||((1014.3 + 2786.3) / 8319.7)||/||((1155.1 + 2580.8) / 7991.5)|
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|
|=||(578.8 - -47.6||-||547.3)||/||8319.7|
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 -2.39 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