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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.
During the past 13 years, the highest Beneish M-Score of Astec Industries Inc was -1.89. The lowest was -2.99. 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 Astec Industries 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 * 0.9278||+||0.528 * 0.9915||+||0.404 * 1.043||+||0.892 * 1.0078||+||0.115 * 0.9278|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0182||+||4.679 * -0.0014||-||0.327 * 0.903|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $98.9 Mil.|
Revenue was 215.016 + 211.35 + 268.042 + 288.748 = $983.2 Mil.
Gross Profit was 45.426 + 45.138 + 62.233 + 66.045 = $218.8 Mil.
Total Current Assets was $541.8 Mil.
Total Assets was $777.4 Mil.
Property, Plant and Equipment(Net PPE) was $170.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.1 Mil.
Selling, General & Admin. Expense(SGA) was $145.2 Mil.
Total Current Liabilities was $142.0 Mil.
Long-Term Debt was $5.2 Mil.
Net Income was 3.596 + 2.292 + 11.805 + 15.105 = $32.8 Mil.
Non Operating Income was 0.904 + 0.382 + 0.146 + 1.624 = $3.1 Mil.
Cash Flow from Operations was 8.722 + 7.782 + 7.766 + 6.596 = $30.9 Mil.
|Accounts Receivable was $105.7 Mil.
Revenue was 239.509 + 220.157 + 277.256 + 238.673 = $975.6 Mil.
Gross Profit was 53.12 + 43.261 + 62.178 + 56.757 = $215.3 Mil.
Total Current Assets was $550.0 Mil.
Total Assets was $802.3 Mil.
Property, Plant and Equipment(Net PPE) was $187.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.4 Mil.
Selling, General & Admin. Expense(SGA) was $141.5 Mil.
Total Current Liabilities was $161.1 Mil.
Long-Term Debt was $7.1 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)|
|=||(98.865 / 983.156)||/||(105.743 / 975.595)|
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)|
|=||(45.138 / 975.595)||/||(45.426 / 983.156)|
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 - (541.797 + 170.206) / 777.353)||/||(1 - (549.991 + 187.61) / 802.265)|
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))|
|=||(24.376 / (24.376 + 187.61))||/||(24.078 / (24.078 + 170.206))|
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)|
|=||(145.179 / 983.156)||/||(141.489 / 975.595)|
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)|
|=||((5.154 + 142.012) / 777.353)||/||((7.061 + 161.129) / 802.265)|
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|
|=||(32.798 - 3.056||-||30.866)||/||777.353|
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.
Astec Industries Inc has a M-score of -2.51 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
Astec Industries Inc Annual Data
Astec Industries Inc Quarterly Data