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Air T Inc (NAS:AIRT)
Beneish M-Score
-3.27 (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 -3.27 suggests that the company is not a manipulator.

AIRT' s 10-Year Beneish M-Score Range
Min: -3.43   Max: 9.57
Current: -3.27

-3.43
9.57

During the past 13 years, the highest Beneish M-Score of Air T Inc was 9.57. The lowest was -3.43. And the median was -2.50.


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 * 0.8359+0.528 * 1.0234+0.404 * 0.9108+0.892 * 1.1132+0.115 * 0.6343
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9947+4.679 * -0.1264-0.327 * 1.2579
=-3.27

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was -0.856 + 1.448 + 1.818 + 0.073 = $2.5 Mil.
Non Operating Income was -0.01 + 0 + 0 + 0.012 = $0.0 Mil.
Cash Flow from Operations was 0.897 + 7.651 + 1.089 + -1.665 = $8.0 Mil.
Accounts Receivable was $10.2 Mil.
Revenue was 25.467 + 29.835 + 24.19 + 21.28 = $100.8 Mil.
Gross Profit was 4.377 + 4.761 + 3.752 + 3.315 = $16.2 Mil.
Total Current Assets was $31.2 Mil.
Total Assets was $37.2 Mil.
Property, Plant and Equipment(Net PPE) was $4.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.8 Mil.
Selling, General & Admin. Expense(SGA) was $12.8 Mil.
Total Current Liabilities was $9.0 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)
=(9.535 / 112.182) / (10.247 / 100.772)
=0.08499581 / 0.10168499
=0.8359

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)
=(5.236 / 100.772) / (2.549 / 112.182)
=0.16080856 / 0.15713751
=1.0234

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 - (38.67 + 2.571) / 43.456) / (1 - (31.152 + 3.986) / 37.221)
=0.0509711 / 0.05596303
=0.9108

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
=112.182 / 100.772
=1.1132

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))
=(0.752 / (0.752 + 3.986)) / (0.858 / (0.858 + 2.571))
=0.15871676 / 0.25021872
=0.6343

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)
=(14.222 / 112.182) / (12.843 / 100.772)
=0.12677613 / 0.12744612
=0.9947

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)
=((5 + 8.245) / 43.456) / ((0 + 9.019) / 37.221)
=0.30479105 / 0.24230945
=1.2579

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
=(2.483 - 0.002 - 7.972) / 43.456
=-0.1264

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 -3.27 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

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 1.37840.44061.00172.02990.71421.13230.89670.8359
GMI 00.98960.99471.18671.11431.08830.8791.0234
AQI 1.0751.12430.80641.00170.83361.00590.98240.9108
SGI 1.16491.15650.89421.02821.07221.15310.97781.1132
DEPI 1.10540.95120.89341.0182.16360.81760.83830.6349
SGAI 0.91440.95561.05880.96760.99840.86481.16220.9947
LVGI 0.93380.79890.61441.46760.97370.96021.11141.2579
TATA 0.1037-0.0989-0.05950.19450.0164-0.07470.0536-0.1262
M-score -1.95-3.21-2.83-0.64-2.47-2.51-2.50-3.27

Air T Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.77431.13231.02651.42961.04380.89670.87431.17151.25070.8359
GMI 1.04721.08831.02451.02611.01290.8790.89920.85790.85831.0234
AQI 0.81631.00591.01310.94971.08970.98241.3041.2450.93030.9108
SGI 1.00571.15311.02621.10621.12710.97781.01421.08571.06371.1132
DEPI 0.61230.81961.3371.57281.5440.83830.64960.74910.62370.6343
SGAI 1.0340.8650.97960.91530.95871.16191.11991.10831.04630.9947
LVGI 1.05620.96021.28781.54251.09191.11140.98560.88140.9851.2579
TATA -0.072-0.0748-0.07440.08930.04850.05330.0798-0.04-0.0679-0.1264
M-score -3.14-2.51-2.81-1.68-2.02-2.50-2.20-2.42-2.66-3.27
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