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Air T Inc (NAS:AIRT)
Beneish M-Score
-1.20 (As of Today)

Warning Sign:

Beneish M-Score -1.2 higher than -2.22, which implies that it might have manipulated its financial results.

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 -1.20 signals that the company is a manipulator.

AIRT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.34   Max: 9.56
Current: -1.2

-3.34
9.56

During the past 13 years, the highest Beneish M-Score of Air T Inc was 9.56. The lowest was -3.34. And the median was -2.46.


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 * 0.9766+0.528 * 0.8889+0.404 * 3.2429+0.892 * 1.3212+0.115 * 1.1605
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9654+4.679 * 0.0297-0.327 * 0.989
=-1.20

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $12.3 Mil.
Revenue was 34.581 + 46.619 + 44.654 + 22.359 = $148.2 Mil.
Gross Profit was 3.596 + 10.308 + 9.366 + 2.931 = $26.2 Mil.
Total Current Assets was $39.0 Mil.
Total Assets was $52.2 Mil.
Property, Plant and Equipment(Net PPE) was $4.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.3 Mil.
Selling, General & Admin. Expense(SGA) was $18.1 Mil.
Total Current Liabilities was $15.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -1.086 + 2.971 + 3.794 + -0.736 = $4.9 Mil.
Non Operating Income was 0.198 + 0.004 + 0 + -0.02 = $0.2 Mil.
Cash Flow from Operations was 0.226 + 6.969 + 0.534 + -4.515 = $3.2 Mil.
Accounts Receivable was $9.5 Mil.
Revenue was 24.885 + 30.893 + 34.625 + 21.779 = $112.2 Mil.
Gross Profit was 2.549 + 5.236 + 6.482 + 3.361 = $17.6 Mil.
Total Current Assets was $38.7 Mil.
Total Assets was $43.5 Mil.
Property, Plant and Equipment(Net PPE) was $2.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.9 Mil.
Selling, General & Admin. Expense(SGA) was $14.2 Mil.
Total Current Liabilities was $8.2 Mil.
Long-Term Debt was $5.0 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)
=(12.303 / 148.213) / (9.535 / 112.182)
=0.08300891 / 0.08499581
=0.9766

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)
=(17.628 / 112.182) / (26.201 / 148.213)
=0.15713751 / 0.17677936
=0.8889

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 - (38.96 + 4.578) / 52.155) / (1 - (38.67 + 2.572) / 43.456)
=0.16521906 / 0.05094809
=3.2429

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
=148.213 / 112.182
=1.3212

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))
=(0.858 / (0.858 + 2.572)) / (1.258 / (1.258 + 4.578))
=0.25014577 / 0.2155586
=1.1605

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)
=(18.139 / 148.213) / (14.222 / 112.182)
=0.12238468 / 0.12677613
=0.9654

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)
=((0.005 + 15.717) / 52.155) / ((5 + 8.245) / 43.456)
=0.30144761 / 0.30479105
=0.989

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
=(4.943 - 0.182 - 3.214) / 52.155
=0.0297

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 -1.20 signals that the company is likely to 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

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.03891.37840.44061.00172.02990.71421.13230.89670.83590.9766
GMI 0.80761.04440.98960.99471.18671.12131.00220.94861.02340.8888
AQI 0.96681.0751.12430.80641.00170.83361.00590.98240.91043.2429
SGI 0.84631.16491.15650.89421.02821.07221.15310.97781.11321.3212
DEPI 0.78781.10540.95120.89341.0182.76010.64090.83830.63511.1602
SGAI 1.18050.91130.95561.05880.96760.99840.95311.05450.99470.9653
LVGI 0.95160.93380.79890.61441.46760.97370.96021.11141.25790.989
TATA 0.00510.1037-0.0989-0.06380.19450.017-0.07470.0536-0.12620.0293
M-score -2.71-1.40-3.21-2.85-0.64-2.39-2.59-2.44-3.27-1.20

Air T Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.04380.89670.87431.17151.25070.83590.94420.97320.91430.9766
GMI 1.01290.8790.89920.85790.85831.02341.05221.0390.95010.8889
AQI 1.08970.98241.3041.2450.93030.91042.16182.12122.77813.2429
SGI 1.12710.97781.01421.08571.06371.11321.11351.09921.22841.3212
DEPI 1.5440.83830.64960.74910.62370.63450.89041.02211.48251.1605
SGAI 0.95871.16191.11991.10831.04630.99471.01240.95180.99390.9654
LVGI 1.09191.11140.98560.88140.9851.25791.24471.21040.97890.989
TATA 0.04870.05360.08-0.0397-0.0677-0.1003-0.0530.00530.04920.0297
M-score -2.02-2.50-2.20-2.42-2.66-3.15-2.28-1.98-1.37-1.20
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