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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 AeroVironment Inc was 1.50. The lowest was -3.53. And the median was -2.39.
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 AeroVironment 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 * 0.6823||+||0.528 * 1.2105||+||0.404 * 1.2649||+||0.892 * 0.895||+||0.115 * 1.2045|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0843||+||4.679 * -0.0537||-||0.327 * 1.2239|
|This Year (Oct16) TTM:||Last Year (Oct15) TTM:|
|Accounts Receivable was $26.1 Mil.|
Revenue was 50.116 + 36.218 + 84.757 + 67.56 = $238.7 Mil.
Gross Profit was 17.417 + 6.683 + 37.922 + 26.625 = $88.6 Mil.
Total Current Assets was $313.9 Mil.
Total Assets was $389.9 Mil.
Property, Plant and Equipment(Net PPE) was $17.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.7 Mil.
Selling, General & Admin. Expense(SGA) was $57.1 Mil.
Total Current Liabilities was $39.4 Mil.
Long-Term Debt was $0.3 Mil.
Net Income was -4.172 + -11.642 + 5.364 + 6.164 = $-4.3 Mil.
Non Operating Income was -0.13 + -0.3 + 0.097 + -0.215 = $-0.5 Mil.
Cash Flow from Operations was -5.036 + -1.243 + 6.25 + 17.21 = $17.2 Mil.
|Accounts Receivable was $42.7 Mil.
Revenue was 64.731 + 47.05 + 86.471 + 68.397 = $266.6 Mil.
Gross Profit was 31.533 + 16.023 + 45.35 + 26.993 = $119.9 Mil.
Total Current Assets was $321.3 Mil.
Total Assets was $380.0 Mil.
Property, Plant and Equipment(Net PPE) was $13.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.8 Mil.
Selling, General & Admin. Expense(SGA) was $58.9 Mil.
Total Current Liabilities was $31.6 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)|
|=||(26.102 / 238.651)||/||(42.746 / 266.649)|
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)|
|=||(119.899 / 266.649)||/||(88.647 / 238.651)|
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 - (313.887 + 17.445) / 389.898)||/||(1 - (321.32 + 13.579) / 380.029)|
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))|
|=||(6.828 / (6.828 + 13.579))||/||(6.71 / (6.71 + 17.445))|
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)|
|=||(57.138 / 238.651)||/||(58.879 / 266.649)|
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)|
|=||((0.276 + 39.4) / 389.898)||/||((0 + 31.597) / 380.029)|
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|
|=||(-4.286 - -0.548||-||17.181)||/||389.898|
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.
AeroVironment Inc has a M-score of -2.96 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
AeroVironment Inc Annual Data
AeroVironment Inc Quarterly Data