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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 -0.98. The lowest was -3.33. And the median was -2.43.
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 * 1.0274||+||0.528 * 0.9253||+||0.404 * 0.9158||+||0.892 * 1.0306||+||0.115 * 0.8208|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9718||+||4.679 * -0.0894||-||0.327 * 1.1995|
|This Year (Apr15) TTM:||Last Year (Apr14) TTM:|
|Accounts Receivable was $33.6 Mil.|
Revenue was 86.471 + 68.397 + 52.664 + 51.866 = $259.4 Mil.
Gross Profit was 45.35 + 26.993 + 17.871 + 14.054 = $104.3 Mil.
Total Current Assets was $329.0 Mil.
Total Assets was $397.5 Mil.
Property, Plant and Equipment(Net PPE) was $13.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.4 Mil.
Selling, General & Admin. Expense(SGA) was $55.8 Mil.
Total Current Liabilities was $46.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 7.08 + 2.325 + -2.901 + -3.609 = $2.9 Mil.
Non Operating Income was -0.727 + -0.284 + -0.583 + 0.591 = $-1.0 Mil.
Cash Flow from Operations was 25.87 + 3.582 + -4.407 + 14.368 = $39.4 Mil.
|Accounts Receivable was $31.7 Mil.
Revenue was 73.498 + 69.221 + 64.867 + 44.117 = $251.7 Mil.
Gross Profit was 30.138 + 27.052 + 23.878 + 12.545 = $93.6 Mil.
Total Current Assets was $306.9 Mil.
Total Assets was $385.0 Mil.
Property, Plant and Equipment(Net PPE) was $20.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.2 Mil.
Selling, General & Admin. Expense(SGA) was $55.7 Mil.
Total Current Liabilities was $37.7 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)|
|=||(33.607 / 259.398)||/||(31.739 / 251.703)|
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)|
|=||(26.993 / 251.703)||/||(45.35 / 259.398)|
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 - (329.032 + 13.499) / 397.467)||/||(1 - (306.857 + 19.997) / 384.954)|
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))|
|=||(9.155 / (9.155 + 19.997))||/||(8.366 / (8.366 + 13.499))|
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)|
|=||(55.763 / 259.398)||/||(55.679 / 251.703)|
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 + 46.735) / 397.467)||/||((0 + 37.735) / 384.954)|
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|
|=||(2.895 - -1.003||-||39.413)||/||397.467|
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 -3.00 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