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Air T Inc (NAS:AIRT)
Beneish M-Score
-2.03 (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 -2.03 signals that the company is a manipulator.

AIRT' s 10-Year Beneish M-Score Range
Min: -3.76   Max: 9.57
Current: -2.03

-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 -2.24.


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 * 1.0852+0.528 * 0.9436+0.404 * 1.0897+0.892 * 1.1271+0.115 * 1.544
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.047+4.679 * 0.0487-0.327 * 1.0919
=-2.03

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $10.5 Mil.
Revenue was 29.835 + 24.19 + 21.28 + 30.711 = $106.0 Mil.
Gross Profit was 4.761 + 3.752 + 3.315 + 5.026 = $16.9 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 $13.7 Mil.
Total Current Liabilities was $9.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 0.455 + 0.456 + 0.139 + 0.393 = $1.4 Mil.
Non Operating Income was 0 + 0.006 + 0 + 0.002 = $0.0 Mil.
Cash Flow from Operations was 5.342 + -4.887 + -0.542 + -0.258 = $-0.3 Mil.
Accounts Receivable was $8.6 Mil.
Revenue was 26.703 + 21.162 + 24.488 + 21.71 = $94.1 Mil.
Gross Profit was 4.058 + 3.163 + 3.475 + 3.414 = $14.1 Mil.
Total Current Assets was $32.5 Mil.
Total Assets was $36.2 Mil.
Property, Plant and Equipment(Net PPE) was $1.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.6 Mil.
Selling, General & Admin. Expense(SGA) was $11.6 Mil.
Total Current Liabilities was $8.4 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)
=(10.481 / 106.016) / (8.569 / 94.063)
=0.09886244 / 0.09109852
=1.0852

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)
=(3.752 / 94.063) / (4.761 / 106.016)
=0.15000585 / 0.158976
=0.9436

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 - (30.517 + 3.974) / 36.52) / (1 - (32.501 + 1.859) / 36.206)
=0.0555586 / 0.05098602
=1.0897

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
=106.016 / 94.063
=1.1271

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))
=(0.553 / (0.553 + 1.859)) / (0.693 / (0.693 + 3.974))
=0.22927032 / 0.14848939
=1.544

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)
=(13.675 / 106.016) / (11.588 / 94.063)
=0.12898996 / 0.12319403
=1.047

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 + 9.269) / 36.52) / ((0 + 8.416) / 36.206)
=0.25380613 / 0.23244766
=1.0919

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
=(1.443 - 0.008 - -0.345) / 36.52
=0.0487

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 -2.03 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

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
DSRI 1.37150.46761.11431.72410.76541.0883
GMI 00.98960.99471.18671.11431.0084
AQI 1.0751.12430.80641.00170.83361.0059
SGI 1.16491.15650.89421.02821.07221.1531
DEPI 1.10540.95120.89341.0182.16360.8176
SGAI 0.91440.95561.05880.96760.99840.9531
LVGI 0.93380.79890.61441.46760.97370.9602
TATA 0.1037-0.0989-0.05950.19450.0164-0.0747
M-score -1.96-3.18-2.72-0.92-2.42-2.60

Air T Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.04640.81380.76541.34950.66040.75171.08831.04751.43161.0852
GMI 1.15591.10971.11431.1331.07211.04721.00840.94860.95280.9436
AQI 1.00860.97570.83360.72170.82690.81631.00591.01310.94971.0897
SGI 1.16861.21191.07221.14621.03131.00571.15311.02621.10621.1271
DEPI 1.63161.66762.15830.9390.7270.61230.81961.3371.57281.544
SGAI 0.90290.88920.99820.93551.02731.0340.95331.07741.00571.047
LVGI 1.19770.82950.97371.16460.75131.05620.96021.28781.54251.0919
TATA 0.07650.00530.01640.0637-0.0452-0.072-0.0748-0.07430.08950.0487
M-score -1.82-2.24-2.42-1.82-2.96-3.16-2.61-2.85-1.73-2.03
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