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GuruFocus has detected 2 Warning Signs with Andersons Inc $ANDE.
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Andersons Inc (NAS:ANDE)
Beneish M-Score
-2.40 (As of Today)

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 -2.39 suggests that the company is not a manipulator.

ANDE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.19   Max: -0.42
Current: -2.4

-3.19
-0.42

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.


Definition

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
=-2.39

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

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

Measured as the ratio of days’ sales in receivables in year t to year t-1.

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)
=0.04960724 / 0.04070791
=1.2186

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(375.84 / 4198.496) / (345.506 / 3924.79)
=0.08951777 / 0.08803172
=1.0169

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

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)
=0.32454994 / 0.3282263
=0.9888

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=3924.79 / 4198.496
=0.9348

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))
=0.14699953 / 0.15780058
=0.9316

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)
=0.08112409 / 0.09278585
=0.8743

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)
=0.5360152 / 0.56133459
=0.9549

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(11.594 - 15.389 - 39.585) / 2232.849
=-0.0194

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.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Andersons Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.74260.83471.21640.98910.81671.08160.78331.29931.00961.2186
GMI 1.40991.36370.87491.01761.07651.13541.04210.7450.97721.0169
AQI 2.68381.05531.12360.84791.08040.92561.21160.95041.1820.9888
SGI 1.63171.46670.8671.12181.34841.1521.06310.81010.92480.9348
DEPI 0.4481.05780.91931.04471.08321.57490.96131.03870.81810.9316
SGAI 0.65650.7291.26520.87450.86980.93561.06071.41381.3210.8743
LVGI 1.12830.94580.93351.06920.90921.09220.92440.93251.00080.9549
TATA 0.1335-0.2216-0.14670.145-0.141-0.1284-0.1455-0.0033-0.0803-0.0194
M-score -0.68-2.97-3.14-1.75-2.86-2.78-3.19-2.59-2.93-2.39

Andersons Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.06521.29931.30051.45841.38121.00961.07350.97830.95981.2186
GMI 0.75160.7450.75560.8420.90470.97721.03291.01821.02751.0169
AQI 0.94220.95041.69341.08221.19091.1821.13310.99591.03280.9888
SGI 0.85120.81010.84090.86270.89980.92480.92190.91070.89690.9348
DEPI 1.00631.03870.63160.99260.95780.81810.84470.79950.85880.9316
SGAI 1.38771.41381.3511.28091.24121.3211.29851.25761.20080.8743
LVGI 0.93610.93250.98811.0440.99771.00081.00371.00480.92260.9549
TATA -0.1583-0.0033-0.0895-0.0930.0205-0.0803-0.0935-0.0275-0.0892-0.0194
M-score -3.49-2.59-2.71-2.73-2.14-2.93-2.92-2.77-3.02-2.39
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