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Air T Inc (NAS:AIRT)
Beneish M-Score
-2.66 (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.

Air T Inc has a M-score of -2.66 suggests that the company is not a manipulator.

AIRT' s 10-Year Beneish M-Score Range
Min: -3.76   Max: 9.57
Current: -2.66

-3.76
9.57

During the past 13 years, the highest Beneish M-Score of Air T Inc was 9.57. The lowest was -3.76. And the median was -2.27.


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 Air T 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 * 1.2507+0.528 * 0.8583+0.404 * 0.9303+0.892 * 1.0637+0.115 * 0.6237
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0463+4.679 * -0.0679-0.327 * 0.985
=-2.66

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $13.3 Mil.
Revenue was 30.893 + 34.625 + 21.779 + 25.467 = $112.8 Mil.
Gross Profit was 5.236 + 6.482 + 3.361 + 4.377 = $19.5 Mil.
Total Current Assets was $37.5 Mil.
Total Assets was $42.5 Mil.
Property, Plant and Equipment(Net PPE) was $2.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.9 Mil.
Selling, General & Admin. Expense(SGA) was $13.9 Mil.
Total Current Liabilities was $10.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 1.448 + 1.818 + 0.073 + 0.417 = $3.8 Mil.
Non Operating Income was 0 + 0 + 0.012 + 0.026 = $0.0 Mil.
Cash Flow from Operations was 7.651 + 1.089 + -1.665 + -0.468 = $6.6 Mil.
Accounts Receivable was $10.0 Mil.
Revenue was 29.835 + 24.19 + 21.28 + 30.711 = $106.0 Mil.
Gross Profit was 4.761 + 3.752 + 3.315 + 3.872 = $15.7 Mil.
Total Current Assets was $30.5 Mil.
Total Assets was $36.5 Mil.
Property, Plant and Equipment(Net PPE) was $4.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.7 Mil.
Selling, General & Admin. Expense(SGA) was $12.5 Mil.
Total Current Liabilities was $9.3 Mil.
Long-Term Debt was $0.0 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)
=(13.328 / 112.764) / (10.019 / 106.016)
=0.11819375 / 0.0945046
=1.2507

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)
=(6.482 / 106.016) / (5.236 / 112.764)
=0.14809085 / 0.17253733
=0.8583

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 - (37.529 + 2.797) / 42.524) / (1 - (30.517 + 3.974) / 36.52)
=0.05168846 / 0.0555586
=0.9303

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
=112.764 / 106.016
=1.0637

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))
=(0.693 / (0.693 + 3.974)) / (0.874 / (0.874 + 2.797))
=0.14848939 / 0.23808227
=0.6237

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)
=(13.935 / 112.764) / (12.521 / 106.016)
=0.12357667 / 0.11810481
=1.0463

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)
=((0 + 10.631) / 42.524) / ((0 + 9.269) / 36.52)
=0.25 / 0.25380613
=0.985

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
=(3.756 - 0.038 - 6.607) / 42.524
=-0.0679

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.

Air T Inc has a M-score of -2.66 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.

Air T Inc Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 1.37840.44061.00172.02990.71421.13230.8967
GMI 00.98960.99471.18671.11431.08830.879
AQI 1.0751.12430.80641.00170.83361.00590.9824
SGI 1.16491.15650.89421.02821.07221.15310.9778
DEPI 1.10540.95120.89341.0182.16360.81760.8383
SGAI 0.91440.95561.05880.96760.99840.86481.1622
LVGI 0.93380.79890.61441.46760.97370.96021.1114
TATA 0.1037-0.0989-0.05950.19450.0164-0.07470.0536
M-score -1.95-3.21-2.83-0.64-2.47-2.51-2.50

Air T Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.65980.77431.13231.02651.42961.04380.89670.87431.17151.2507
GMI 1.07211.04721.08831.02451.02611.01290.8790.89920.85790.8583
AQI 0.82690.81631.00591.01310.94971.08970.98241.3041.2450.9303
SGI 1.03131.00571.15311.02621.10621.12710.97781.01421.08571.0637
DEPI 0.7270.61230.81961.3371.57281.5440.83830.64960.74910.6237
SGAI 1.02731.0340.8650.97960.91530.95871.16191.11991.10831.0463
LVGI 0.75131.05620.96021.28781.54251.09191.11140.98560.88140.985
TATA -0.0452-0.072-0.0748-0.07440.08930.04850.05330.0798-0.04-0.0679
M-score -2.96-3.14-2.51-2.81-1.68-2.02-2.50-2.20-2.42-2.66
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