AOS has been removed from your Stock Email Alerts list.
Please enter Portfolio Name for new portfolio.
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 A.O. Smith Corp was -1.33. The lowest was -3.04. And the median was -2.53.
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 A.O. Smith Corp 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 * 0.9796||+||0.528 * 0.9162||+||0.404 * 0.9256||+||0.892 * 1.0766||+||0.115 * 0.9846|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9915||+||4.679 * -0.0273||-||0.327 * 1.0367|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $501 Mil.|
Revenue was 639.4 + 625.1 + 653.5 + 618.5 = $2,537 Mil.
Gross Profit was 260.6 + 256.7 + 263.3 + 229.2 = $1,010 Mil.
Total Current Assets was $1,455 Mil.
Total Assets was $2,647 Mil.
Property, Plant and Equipment(Net PPE) was $443 Mil.
Depreciation, Depletion and Amortization(DDA) was $63 Mil.
Selling, General & Admin. Expense(SGA) was $611 Mil.
Total Current Liabilities was $653 Mil.
Long-Term Debt was $236 Mil.
Net Income was 79.8 + 73.6 + 71.1 + 58.4 = $283 Mil.
Non Operating Income was 3.2 + 2.2 + 2.7 + 2.7 = $11 Mil.
Cash Flow from Operations was 113.1 + 173.1 + 61.6 + -3.4 = $344 Mil.
|Accounts Receivable was $475 Mil.
Revenue was 626.8 + 581.6 + 595.4 + 552.2 = $2,356 Mil.
Gross Profit was 231.9 + 215.3 + 216.2 + 195.9 = $859 Mil.
Total Current Assets was $1,319 Mil.
Total Assets was $2,515 Mil.
Property, Plant and Equipment(Net PPE) was $428 Mil.
Depreciation, Depletion and Amortization(DDA) was $60 Mil.
Selling, General & Admin. Expense(SGA) was $572 Mil.
Total Current Liabilities was $605 Mil.
Long-Term Debt was $210 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)|
|=||(501.4 / 2536.5)||/||(475.4 / 2356)|
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)|
|=||(256.7 / 2356)||/||(260.6 / 2536.5)|
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 - (1455.3 + 442.7) / 2646.5)||/||(1 - (1319 + 427.7) / 2515.3)|
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))|
|=||(59.8 / (59.8 + 427.7))||/||(63 / (63 + 442.7))|
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)|
|=||(610.7 / 2536.5)||/||(572.1 / 2356)|
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)|
|=||((236.1 + 653.2) / 2646.5)||/||((210.1 + 605.2) / 2515.3)|
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|
|=||(282.9 - 10.8||-||344.4)||/||2646.5|
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.
A.O. Smith Corp has a M-score of -2.64 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
A.O. Smith Corp Annual Data
A.O. Smith Corp Quarterly Data