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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.
During the past 13 years, the highest Beneish M-Score of Andersons Inc was -0.43. The lowest was -3.19. And the median was -2.59.
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 Andersons 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 * 1.0096||+||0.528 * 0.9772||+||0.404 * 1.1107||+||0.892 * 0.9248||+||0.115 * 0.8909|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.321||+||4.679 * -0.0803||-||0.327 * 1.0008|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $171 Mil.|
Revenue was 1104.14 + 935.774 + 1208.492 + 950.09 = $4,198 Mil.
Gross Profit was 99.164 + 85.19 + 108.173 + 83.313 = $376 Mil.
Total Current Assets was $1,130 Mil.
Total Assets was $2,359 Mil.
Property, Plant and Equipment(Net PPE) was $455 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $390 Mil.
Total Current Liabilities was $888 Mil.
Long-Term Debt was $436 Mil.
Net Income was -47.028 + -1.227 + 31.092 + 4.097 = $-13 Mil.
Non Operating Income was -21.3 + 7.2 + 29.962 + 6.368 = $22 Mil.
Cash Flow from Operations was 96.361 + 117.171 + 227.261 + -286.659 = $154 Mil.
|Accounts Receivable was $183 Mil.
Revenue was 1271.768 + 952.927 + 1312.082 + 1003.294 = $4,540 Mil.
Gross Profit was 113.951 + 84.918 + 121.495 + 76.775 = $397 Mil.
Total Current Assets was $1,254 Mil.
Total Assets was $2,365 Mil.
Property, Plant and Equipment(Net PPE) was $411 Mil.
Depreciation, Depletion and Amortization(DDA) was $62 Mil.
Selling, General & Admin. Expense(SGA) was $319 Mil.
Total Current Liabilities was $1,028 Mil.
Long-Term Debt was $299 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)|
|=||(170.912 / 4198.496)||/||(183.059 / 4540.071)|
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)|
|=||(85.19 / 4540.071)||/||(99.164 / 4198.496)|
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 - (1129.522 + 455.26) / 2359.101)||/||(1 - (1254.447 + 411.476) / 2364.692)|
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))|
|=||(62.005 / (62.005 + 411.476))||/||(78.456 / (78.456 + 455.26))|
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)|
|=||(389.561 / 4198.496)||/||(318.881 / 4540.071)|
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)|
|=||((436.208 + 888.037) / 2359.101)||/||((298.638 + 1027.706) / 2364.692)|
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|
|=||(-13.066 - 22.23||-||154.134)||/||2359.101|
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.
Andersons Inc has a M-score of -2.95 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
Andersons Inc Annual Data
Andersons Inc Quarterly Data