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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 -1.25. The lowest was -3.27. And the median was -2.35.
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 * 1.0689||+||0.528 * 1.0149||+||0.404 * 1.4017||+||0.892 * 1.1102||+||0.115 * 0.8967|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9369||+||4.679 * 0.0165||-||0.327 * 1.0635|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $125.7 Mil.|
Revenue was 288.748 + 239.509 + 220.157 + 277.256 = $1,025.7 Mil.
Gross Profit was 66.045 + 53.12 + 43.261 + 62.178 = $224.6 Mil.
Total Current Assets was $568.2 Mil.
Total Assets was $814.1 Mil.
Property, Plant and Equipment(Net PPE) was $184.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.9 Mil.
Selling, General & Admin. Expense(SGA) was $141.9 Mil.
Total Current Liabilities was $165.9 Mil.
Long-Term Debt was $5.1 Mil.
Net Income was 15.105 + 8.5 + 1.916 + 14.497 = $40.0 Mil.
Non Operating Income was 1.624 + 0.12 + 0.263 + 0.221 = $2.2 Mil.
Cash Flow from Operations was 6.596 + 6.018 + -0.177 + 11.918 = $24.4 Mil.
|Accounts Receivable was $105.9 Mil.
Revenue was 238.673 + 223.862 + 213.177 + 248.127 = $923.8 Mil.
Gross Profit was 56.757 + 47.324 + 45.787 + 55.442 = $205.3 Mil.
Total Current Assets was $545.4 Mil.
Total Assets was $774.7 Mil.
Property, Plant and Equipment(Net PPE) was $187.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.4 Mil.
Selling, General & Admin. Expense(SGA) was $136.4 Mil.
Total Current Liabilities was $153.0 Mil.
Long-Term Debt was $0.0 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)|
|=||(125.72 / 1025.67)||/||(105.939 / 923.839)|
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)|
|=||(53.12 / 923.839)||/||(66.045 / 1025.67)|
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 - (568.211 + 184.922) / 814.073)||/||(1 - (545.437 + 187.895) / 774.704)|
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))|
|=||(22.365 / (22.365 + 187.895))||/||(24.888 / (24.888 + 184.922))|
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)|
|=||(141.869 / 1025.67)||/||(136.394 / 923.839)|
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)|
|=||((5.084 + 165.851) / 814.073)||/||((0 + 152.96) / 774.704)|
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|
|=||(40.018 - 2.228||-||24.355)||/||814.073|
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 -2.09 signals that the company is likely to 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