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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 12 years, the highest Beneish M-Score of AeroVironment Inc was 1.50. The lowest was -3.46. And the median was -2.36.
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 * 0.7295||+||0.528 * 0.9744||+||0.404 * 0.8879||+||0.892 * 1.1764||+||0.115 * 0.7718|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9641||+||4.679 * -0.1115||-||0.327 * 1.1795|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $31.1 Mil.|
Revenue was 52.664 + 51.866 + 73.498 + 69.221 = $247.2 Mil.
Gross Profit was 17.871 + 14.054 + 30.138 + 27.052 = $89.1 Mil.
Total Current Assets was $311.6 Mil.
Total Assets was $386.1 Mil.
Property, Plant and Equipment(Net PPE) was $16.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.0 Mil.
Selling, General & Admin. Expense(SGA) was $57.0 Mil.
Total Current Liabilities was $43.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.901 + -3.609 + 8.057 + 11.216 = $12.8 Mil.
Non Operating Income was -0.583 + 0.591 + 2.648 + 4.675 = $7.3 Mil.
Cash Flow from Operations was -4.407 + 14.368 + 25.391 + 13.145 = $48.5 Mil.
|Accounts Receivable was $36.2 Mil.
Revenue was 64.867 + 44.117 + 54.11 + 47.087 = $210.2 Mil.
Gross Profit was 23.878 + 12.545 + 17.722 + 19.673 = $73.8 Mil.
Total Current Assets was $265.8 Mil.
Total Assets was $350.8 Mil.
Property, Plant and Equipment(Net PPE) was $26.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.5 Mil.
Selling, General & Admin. Expense(SGA) was $50.3 Mil.
Total Current Liabilities was $33.3 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)|
|=||(31.096 / 247.249)||/||(36.238 / 210.181)|
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)|
|=||(14.054 / 210.181)||/||(17.871 / 247.249)|
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 - (311.567 + 16.889) / 386.129)||/||(1 - (265.763 + 26.039) / 350.816)|
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))|
|=||(9.504 / (9.504 + 26.039))||/||(8.954 / (8.954 + 16.889))|
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)|
|=||(57.009 / 247.249)||/||(50.266 / 210.181)|
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 + 43.241) / 386.129)||/||((0 + 33.309) / 350.816)|
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|
|=||(12.763 - 7.331||-||48.497)||/||386.129|
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 -3.23 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