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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 -0.42. The lowest was -3.19. And the median was -2.58.
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 * 1.2186||+||0.528 * 1.0169||+||0.404 * 0.9888||+||0.892 * 0.9348||+||0.115 * 0.9316|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8743||+||4.679 * -0.0194||-||0.327 * 0.9549|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $195 Mil.|
Revenue was 1113.055 + 859.612 + 1064.244 + 887.879 = $3,925 Mil.
Gross Profit was 103.694 + 77.015 + 97.042 + 67.755 = $346 Mil.
Total Current Assets was $1,058 Mil.
Total Assets was $2,233 Mil.
Property, Plant and Equipment(Net PPE) was $450 Mil.
Depreciation, Depletion and Amortization(DDA) was $84 Mil.
Selling, General & Admin. Expense(SGA) was $318 Mil.
Total Current Liabilities was $800 Mil.
Long-Term Debt was $397 Mil.
Net Income was 10.145 + 1.722 + 14.423 + -14.696 = $12 Mil.
Non Operating Income was 0.456 + 10.638 + 8.026 + -3.731 = $15 Mil.
Cash Flow from Operations was -1.761 + 235.707 + 73.492 + -267.853 = $40 Mil.
|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.
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)|
|=||(194.698 / 3924.79)||/||(170.912 / 4198.496)|
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)|
|=||(375.84 / 4198.496)||/||(345.506 / 3924.79)|
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 - (1058.126 + 450.052) / 2232.849)||/||(1 - (1129.522 + 455.26) / 2359.101)|
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))|
|=||(78.456 / (78.456 + 455.26))||/||(84.325 / (84.325 + 450.052))|
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)|
|=||(318.395 / 3924.79)||/||(389.561 / 4198.496)|
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)|
|=||((397.065 + 799.776) / 2232.849)||/||((436.208 + 888.037) / 2359.101)|
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|
|=||(11.594 - 15.389||-||39.585)||/||2232.849|
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 -2.39 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