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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.
Andersons Inc has a M-score of -3.04 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Andersons Inc was -0.49. The lowest was -5.20. And the median was -2.45.
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 * 0.9757||+||0.528 * 0.8297||+||0.404 * 1.1305||+||0.892 * 0.898||+||0.115 * 1.0295|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3403||+||4.679 * -0.0847||-||0.327 * 0.8724|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $190 Mil.|
Revenue was 1312.082 + 1003.294 + 1584.266 + 1181.374 = $5,081 Mil.
Gross Profit was 121.495 + 76.775 + 109.577 + 73.146 = $381 Mil.
Total Current Assets was $865 Mil.
Total Assets was $1,893 Mil.
Property, Plant and Equipment(Net PPE) was $391 Mil.
Depreciation, Depletion and Amortization(DDA) was $56 Mil.
Selling, General & Admin. Expense(SGA) was $302 Mil.
Total Current Liabilities was $613 Mil.
Long-Term Debt was $300 Mil.
Net Income was 44.301 + 22.708 + 30.661 + 17.161 = $115 Mil.
Non Operating Income was 36.01 + 40.113 + 31.967 + 29.782 = $138 Mil.
Cash Flow from Operations was 239.028 + -498.613 + 208.227 + 188.63 = $137 Mil.
|Accounts Receivable was $216 Mil.
Revenue was 1566.964 + 1271.97 + 1680.641 + 1138.402 = $5,658 Mil.
Gross Profit was 103.229 + 79.273 + 91.169 + 78.316 = $352 Mil.
Total Current Assets was $907 Mil.
Total Assets was $1,821 Mil.
Property, Plant and Equipment(Net PPE) was $372 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $251 Mil.
Total Current Liabilities was $598 Mil.
Long-Term Debt was $409 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)|
|=||(189.646 / 5081.016)||/||(216.432 / 5657.977)|
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)|
|=||(76.775 / 5657.977)||/||(121.495 / 5081.016)|
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 - (865.193 + 390.587) / 1892.628)||/||(1 - (907.269 + 371.716) / 1820.981)|
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))|
|=||(54.661 / (54.661 + 371.716))||/||(55.557 / (55.557 + 390.587))|
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)|
|=||(302.221 / 5081.016)||/||(251.091 / 5657.977)|
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)|
|=||((300.22 + 613.216) / 1892.628)||/||((409.02 + 598.344) / 1820.981)|
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|
|=||(114.831 - 137.872||-||137.272)||/||1892.628|
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 -3.04 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