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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 * 1.3005||+||0.528 * 0.7556||+||0.404 * 1.024||+||0.892 * 0.8409||+||0.115 * 0.9721|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.351||+||4.679 * -0.0895||-||0.327 * 0.9881|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $210 Mil.|
Revenue was 950.09 + 1271.768 + 952.927 + 1312.082 = $4,487 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 $452 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.
Net Income was 4.097 + 25.892 + 16.825 + 44.301 = $91 Mil.
Non Operating Income was 6.368 + 25.923 + 25.602 + 36.01 = $94 Mil.
Cash Flow from Operations was -286.659 + -112.345 + 361.859 + 239.028 = $202 Mil.
|Accounts Receivable was $192 Mil.
Revenue was 1003.294 + 1584.266 + 1181.374 + 1566.964 = $5,336 Mil.
Gross Profit was 76.775 + 109.577 + 73.146 + 103.229 = $363 Mil.
Total Current Assets was $1,139 Mil.
Total Assets was $2,126 Mil.
Property, Plant and Equipment(Net PPE) was $386 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $287 Mil.
Total Current Liabilities was $892 Mil.
Long-Term Debt was $306 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)|
|=||(209.928 / 4486.867)||/||(191.972 / 5335.898)|
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)|
|=||(113.951 / 5335.898)||/||(83.313 / 4486.867)|
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 - (1173.75 + 451.638) / 2287.627)||/||(1 - (1138.549 + 386.132) / 2125.583)|
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))|
|=||(54.362 / (54.362 + 386.132))||/||(65.672 / (65.672 + 451.638))|
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)|
|=||(326.5 / 4486.867)||/||(287.41 / 5335.898)|
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)|
|=||((323.258 + 950.794) / 2287.627)||/||((306.161 + 891.905) / 2125.583)|
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|
|=||(91.115 - 93.903||-||201.883)||/||2287.627|
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