Switch to:
ARRIS Group Inc (NAS:ARRS)
Beneish M-Score
-2.31 (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.

ARRIS Group Inc has a M-score of -2.31 suggests that the company is not a manipulator.

ARRS' s 10-Year Beneish M-Score Range
Min: -4.27   Max: -0.9
Current: -2.31

-4.27
-0.9

During the past 13 years, the highest Beneish M-Score of ARRIS Group Inc was -0.90. The lowest was -4.27. And the median was -2.50.


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 ARRIS Group 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 * 1.0187+0.528 * 0.9986+0.404 * 0.9516+0.892 * 1.0453+0.115 * 0.9615
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9221+4.679 * 0.0212-0.327 * 0.9103
=-2.31

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $786 Mil.
Revenue was 1260.077 + 1215.158 + 1263.387 + 1405.445 = $5,144 Mil.
Gross Profit was 364.361 + 336.556 + 380.575 + 435.734 = $1,517 Mil.
Total Current Assets was $2,083 Mil.
Total Assets was $4,559 Mil.
Property, Plant and Equipment(Net PPE) was $324 Mil.
Depreciation, Depletion and Amortization(DDA) was $306 Mil.
Selling, General & Admin. Expense(SGA) was $407 Mil.
Total Current Liabilities was $1,037 Mil.
Long-Term Debt was $1,538 Mil.
Net Income was 16.758 + 19.126 + 192.76 + 54.626 = $283 Mil.
Non Operating Income was 4.315 + -8.792 + -20.225 + -9.412 = $-34 Mil.
Cash Flow from Operations was 71.856 + -63.263 + 122.19 + 89.79 = $221 Mil.
Accounts Receivable was $738 Mil.
Revenue was 1429.071 + 1225.017 + 1199.067 + 1067.823 = $4,921 Mil.
Gross Profit was 419.412 + 346.774 + 366.153 + 316.992 = $1,449 Mil.
Total Current Assets was $1,807 Mil.
Total Assets was $4,331 Mil.
Property, Plant and Equipment(Net PPE) was $377 Mil.
Depreciation, Depletion and Amortization(DDA) was $330 Mil.
Selling, General & Admin. Expense(SGA) was $422 Mil.
Total Current Liabilities was $1,179 Mil.
Long-Term Debt was $1,508 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)
=(785.869 / 5144.067) / (738.008 / 4920.978)
=0.15277192 / 0.14997181
=1.0187

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)
=(336.556 / 4920.978) / (364.361 / 5144.067)
=0.29452093 / 0.29494678
=0.9986

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 - (2083.161 + 324.154) / 4558.675) / (1 - (1806.6 + 376.509) / 4330.82)
=0.4719266 / 0.49591325
=0.9516

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
=5144.067 / 4920.978
=1.0453

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))
=(329.713 / (329.713 + 376.509)) / (305.966 / (305.966 + 324.154))
=0.46686877 / 0.48556783
=0.9615

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)
=(406.607 / 5144.067) / (421.845 / 4920.978)
=0.07904388 / 0.08572381
=0.9221

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)
=((1537.641 + 1036.937) / 4558.675) / ((1507.796 + 1179.15) / 4330.82)
=0.56476454 / 0.62042431
=0.9103

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
=(283.27 - -34.114 - 220.573) / 4558.675
=0.0212

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.

ARRIS Group Inc has a M-score of -2.31 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.

ARRIS Group Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.08091.05341.30110.82790.93120.89271.20920.99491.26290.6392
GMI 1.06420.99131.02430.80370.82221.07121.03421.10341.20980.9501
AQI 0.83460.62022.62390.76430.88470.97151.03120.94971.6940.917
SGI 1.38851.31031.11291.15360.96790.98171.00111.24342.67491.4701
DEPI 1.85591.17861.49640.34681.03830.98731.05360.93771.32010.8464
SGAI 0.78080.89561.02921.24981.06480.94521.07920.87230.78380.8257
LVGI 0.47672.44760.74911.00350.94590.83861.14650.97612.44460.8803
TATA 0.0524-0.0030.0051-0.2366-0.1032-0.0387-0.096-0.0231-0.1403-0.0207
M-score -1.54-2.76-1.28-3.93-3.18-2.69-2.76-2.32-1.41-2.50

ARRIS Group Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.92.1691.7121.26291.09810.46550.58940.63920.9571.0187
GMI 1.14191.28551.22541.20981.17240.94940.94550.95010.94860.9986
AQI 0.83171.48661.68411.6941.86011.05230.96120.9170.91160.9516
SGI 1.24931.7022.14282.67493.19872.39411.90131.47011.18271.0453
DEPI 0.96612.24651.64641.32011.13390.48120.66380.84640.93480.9615
SGAI 0.85570.79070.80170.78380.7670.84080.82560.82570.87640.9221
LVGI 1.0312.4352.44412.44462.14810.91960.90540.88030.910.9103
TATA -0.0324-0.078-0.0905-0.1409-0.1259-0.0847-0.0864-0.0207-0.00360.0212
M-score -2.48-1.09-1.20-1.41-0.90-2.14-2.48-2.50-2.39-2.31
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK