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American Pacific Corporation (NAS:APFC)
Beneish M-Score
-3.25 (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.

American Pacific Corporation has a M-score of -3.25 suggests that the company is not a manipulator.

APFC' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -1.46
Current: -3.25

-3.32
-1.46

During the past 13 years, the highest Beneish M-Score of American Pacific Corporation was -1.46. The lowest was -3.32. And the median was -2.67.


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 American Pacific Corporation 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 * 0.8154+0.528 * 0.8815+0.404 * 0.3786+0.892 * 1.1587+0.115 * 1.0725
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9954+4.679 * -0.0932-0.327 * 1.0092
=-3.25

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep13) TTM:Last Year (Sep12) TTM:
Accounts Receivable was $22.9 Mil.
Revenue was 59.204 + 69.519 + 50.044 + 36.318 = $215.1 Mil.
Gross Profit was 30.442 + 25.206 + 15.894 + 15.412 = $87.0 Mil.
Total Current Assets was $161.1 Mil.
Total Assets was $277.3 Mil.
Property, Plant and Equipment(Net PPE) was $103.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $45.9 Mil.
Total Current Liabilities was $74.8 Mil.
Long-Term Debt was $49.5 Mil.
Net Income was 10.957 + 8.388 + 2.732 + 1.155 = $23.2 Mil.
Non Operating Income was 0 + 0 + 0.008 + -2.835 = $-2.8 Mil.
Cash Flow from Operations was 4.216 + 39.098 + 11.853 + -3.272 = $51.9 Mil.
Accounts Receivable was $24.2 Mil.
Revenue was 49.601 + 57.623 + 39.918 + 38.485 = $185.6 Mil.
Gross Profit was 19.415 + 20.887 + 13.618 + 12.23 = $66.2 Mil.
Total Current Assets was $114.1 Mil.
Total Assets was $246.5 Mil.
Property, Plant and Equipment(Net PPE) was $103.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.5 Mil.
Selling, General & Admin. Expense(SGA) was $39.8 Mil.
Total Current Liabilities was $44.4 Mil.
Long-Term Debt was $65.0 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)
=(22.876 / 215.085) / (24.213 / 185.627)
=0.10635795 / 0.130439
=0.8154

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)
=(25.206 / 185.627) / (30.442 / 215.085)
=0.3563598 / 0.40427738
=0.8815

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 - (161.067 + 103.847) / 277.307) / (1 - (114.057 + 103.316) / 246.464)
=0.04469054 / 0.11803347
=0.3786

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
=215.085 / 185.627
=1.1587

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))
=(14.491 / (14.491 + 103.316)) / (13.453 / (13.453 + 103.847))
=0.12300627 / 0.11468883
=1.0725

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)
=(45.865 / 215.085) / (39.766 / 185.627)
=0.21324128 / 0.2142253
=0.9954

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)
=((49.5 + 74.774) / 277.307) / ((65.004 + 44.442) / 246.464)
=0.44814592 / 0.44406485
=1.0092

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
=(23.232 - -2.827 - 51.895) / 277.307
=-0.0932

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.

American Pacific Corporation has a M-score of -3.25 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 own currency.

American Pacific Corporation Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 2.34270.58781.02570.72151.04951.62660.73330.45070.8154
GMI 1.38080.94061.11470.91281.03851.08041.14790.8180.8815
AQI 0.69831.01370.60640.77950.75141.37920.83581.11770.3786
SGI 0.74721.31782.09261.29611.10440.97061.15971.1551.1587
DEPI 1.56470.93071.83691.01111.17090.98581.0570.97061.0725
SGAI 1.75420.87180.83720.80460.974200.78480.95920.9954
LVGI 1.26261.45924.10750.99410.94140.96271.03370.74911.0092
TATA -0.0245-0.056-0.0434-0.0651-0.047-0.0646-0.1050.0498-0.1136
M-score -1.66-3.00-2.68-2.88-2.60-1.85-3.03-2.58-3.35

American Pacific Corporation Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
DSRI 2.16680.63181.16771.04610.27680.52310.3290.49111.11730.8154
GMI 1.11181.17190.93570.83490.75470.80120.82070.89670.98280.8815
AQI 0.8970.83580.83820.77140.80331.11771.13321.11770.90850.3786
SGI 0.65221.3461.35891.53811.60750.99510.96641.03021.00871.1587
DEPI 1.09831.0571.01780.96380.84350.97061.00911.071.21111.0725
SGAI 1.50660.76030.73340.59160.66040.99011.09731.17741.18380.9954
LVGI 1.15631.03371.03521.01530.94640.74910.71280.75140.77641.0092
TATA -0.0695-0.1056-0.01560.0039-0.05040.04970.03350.0093-0.0468-0.0932
M-score -2.15-2.94-2.14-2.06-2.99-2.67-2.93-2.83-2.56-3.25
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