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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 -5.33. And the median was -2.55.
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 * 1.0658||+||0.528 * 1.0403||+||0.404 * 1.0485||+||0.892 * 0.9285||+||0.115 * 0.9419|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2893||+||4.679 * -0.0935||-||0.327 * 1.0037|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $208 Mil.|
Revenue was 887.879 + 1104.14 + 935.774 + 1208.492 = $4,136 Mil.
Gross Profit was 67.755 + 99.164 + 85.19 + 108.173 = $360 Mil.
Total Current Assets was $1,096 Mil.
Total Assets was $2,320 Mil.
Property, Plant and Equipment(Net PPE) was $463 Mil.
Depreciation, Depletion and Amortization(DDA) was $82 Mil.
Selling, General & Admin. Expense(SGA) was $391 Mil.
Total Current Liabilities was $894 Mil.
Long-Term Debt was $402 Mil.
Net Income was -14.696 + -47.028 + -1.227 + 31.092 = $-32 Mil.
Non Operating Income was -3.731 + -21.3 + 7.2 + 29.962 = $12 Mil.
Cash Flow from Operations was -267.853 + 96.361 + 117.171 + 227.261 = $173 Mil.
|Accounts Receivable was $210 Mil.
Revenue was 918.225 + 1271.768 + 952.927 + 1312.082 = $4,455 Mil.
Gross Profit was 83.313 + 113.951 + 84.918 + 121.495 = $404 Mil.
Total Current Assets was $1,174 Mil.
Total Assets was $2,288 Mil.
Property, Plant and Equipment(Net PPE) was $398 Mil.
Depreciation, Depletion and Amortization(DDA) was $66 Mil.
Selling, General & Admin. Expense(SGA) was $327 Mil.
Total Current Liabilities was $951 Mil.
Long-Term Debt was $323 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)|
|=||(207.74 / 4136.285)||/||(209.928 / 4455.002)|
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)|
|=||(403.677 / 4455.002)||/||(360.282 / 4136.285)|
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 - (1096.102 + 462.661) / 2319.638)||/||(1 - (1173.75 + 398.234) / 2287.627)|
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))|
|=||(65.672 / (65.672 + 398.234))||/||(81.835 / (81.835 + 462.661))|
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)|
|=||(390.838 / 4136.285)||/||(326.5 / 4455.002)|
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)|
|=||((402.36 + 894.291) / 2319.638)||/||((323.258 + 950.794) / 2287.627)|
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|
|=||(-31.859 - 12.131||-||172.94)||/||2319.638|
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 -2.94 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