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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 -2.51.
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 * 1.3812||+||0.528 * 0.9047||+||0.404 * 1.1909||+||0.892 * 0.8998||+||0.115 * 0.9578|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2412||+||4.679 * 0.0205||-||0.327 * 0.9977|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $202 Mil.|
Revenue was 935.774 + 1208.492 + 950.09 + 1271.768 = $4,366 Mil.
Gross Profit was 85.19 + 108.173 + 83.313 + 113.951 = $391 Mil.
Total Current Assets was $904 Mil.
Total Assets was $2,192 Mil.
Property, Plant and Equipment(Net PPE) was $495 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $346 Mil.
Total Current Liabilities was $721 Mil.
Long-Term Debt was $414 Mil.
Net Income was -1.227 + 31.092 + 4.097 + 25.892 = $60 Mil.
Non Operating Income was 7.2 + 29.962 + 6.368 + 25.923 = $69 Mil.
Cash Flow from Operations was 117.171 + 227.261 + -286.659 + -112.345 = $-55 Mil.
|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.
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)|
|=||(201.664 / 4366.124)||/||(162.27 / 4852.569)|
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)|
|=||(108.173 / 4852.569)||/||(85.19 / 4366.124)|
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 - (904.403 + 495.045) / 2191.694)||/||(1 - (1048.915 + 401.8) / 2082.992)|
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))|
|=||(57.979 / (57.979 + 401.8))||/||(75.063 / (75.063 + 495.045))|
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)|
|=||(345.929 / 4366.124)||/||(309.765 / 4852.569)|
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)|
|=||((413.561 + 721.303) / 2191.694)||/||((289.448 + 791.628) / 2082.992)|
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|
|=||(59.854 - 69.453||-||-54.572)||/||2191.694|
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 -2.14 signals that the company is likely to 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