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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.
AeroVironment Inc has a M-score of -2.66 suggests that the company is not a manipulator.
During the past 11 years, the highest Beneish M-Score of AeroVironment Inc was 1.39. The lowest was -3.20. And the median was -2.33.
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 * 1.3175||+||0.528 * 1.1992||+||0.404 * 0.7378||+||0.892 * 0.783||+||0.115 * 1.205|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2605||+||4.679 * -0.0619||-||0.327 * 0.9063|
|This Year (Jan14) TTM:||Last Year (Jan13) TTM:|
|Accounts Receivable was $57.1 Mil.|
Revenue was 69.221 + 64.867 + 44.117 + 54.11 = $232.3 Mil.
Gross Profit was 27.052 + 23.878 + 12.545 + 17.722 = $81.2 Mil.
Total Current Assets was $289.4 Mil.
Total Assets was $366.9 Mil.
Property, Plant and Equipment(Net PPE) was $24.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.4 Mil.
Selling, General & Admin. Expense(SGA) was $53.0 Mil.
Total Current Liabilities was $36.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 11.216 + 1.655 + -7.21 + -0.795 = $4.9 Mil.
Non Operating Income was 4.675 + -2.307 + -3.394 + 6.196 = $5.2 Mil.
Cash Flow from Operations was 13.145 + 3.503 + -13.176 + 18.942 = $22.4 Mil.
|Accounts Receivable was $55.4 Mil.
Revenue was 47.087 + 80.278 + 58.677 + 110.675 = $296.7 Mil.
Gross Profit was 19.673 + 35.636 + 19.505 + 49.555 = $124.4 Mil.
Total Current Assets was $266.8 Mil.
Total Assets was $358.8 Mil.
Property, Plant and Equipment(Net PPE) was $21.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.9 Mil.
Selling, General & Admin. Expense(SGA) was $53.7 Mil.
Total Current Liabilities was $38.8 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)|
|=||(57.105 / 232.315)||/||(55.358 / 296.717)|
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)|
|=||(23.878 / 296.717)||/||(27.052 / 232.315)|
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 - (289.379 + 24.492) / 366.881)||/||(1 - (266.809 + 21.714) / 358.79)|
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))|
|=||(10.895 / (10.895 + 21.714))||/||(9.396 / (9.396 + 24.492))|
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)|
|=||(53.001 / 232.315)||/||(53.704 / 296.717)|
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 + 35.981) / 366.881)||/||((0 + 38.827) / 358.79)|
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|
|=||(4.866 - 5.17||-||22.414)||/||366.881|
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 -2.66 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