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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 -5.20. And the median was -2.50.
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 * 1.0652||+||0.528 * 0.7516||+||0.404 * 0.9422||+||0.892 * 0.8512||+||0.115 * 1.0063|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3877||+||4.679 * -0.1583||-||0.327 * 0.9361|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $162 Mil.|
Revenue was 952.927 + 1312.082 + 1003.294 + 1584.266 = $4,853 Mil.
Gross Profit was 84.918 + 121.495 + 76.775 + 109.577 = $393 Mil.
Total Current Assets was $1,049 Mil.
Total Assets was $2,083 Mil.
Property, Plant and Equipment(Net PPE) was $402 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $310 Mil.
Total Current Liabilities was $792 Mil.
Long-Term Debt was $289 Mil.
Net Income was 16.825 + 44.301 + 22.708 + 30.661 = $114 Mil.
Non Operating Income was 25.602 + 36.01 + 40.113 + 31.967 = $134 Mil.
Cash Flow from Operations was 361.859 + 239.028 + -498.613 + 208.227 = $311 Mil.
|Accounts Receivable was $179 Mil.
Revenue was 1181.374 + 1566.964 + 1271.97 + 1680.641 = $5,701 Mil.
Gross Profit was 73.146 + 103.229 + 79.273 + 91.169 = $347 Mil.
Total Current Assets was $896 Mil.
Total Assets was $1,882 Mil.
Property, Plant and Equipment(Net PPE) was $380 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $262 Mil.
Total Current Liabilities was $663 Mil.
Long-Term Debt was $381 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)|
|=||(162.27 / 4852.569)||/||(178.97 / 5700.949)|
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)|
|=||(121.495 / 5700.949)||/||(84.918 / 4852.569)|
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 - (1048.915 + 401.8) / 2082.992)||/||(1 - (895.514 + 380.374) / 1882.291)|
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))|
|=||(55.282 / (55.282 + 380.374))||/||(57.979 / (57.979 + 401.8))|
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)|
|=||(309.765 / 4852.569)||/||(262.255 / 5700.949)|
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)|
|=||((289.448 + 791.628) / 2082.992)||/||((381.018 + 662.579) / 1882.291)|
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|
|=||(114.495 - 133.692||-||310.501)||/||2082.992|
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 -3.49 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