Switch to:
Avery Dennison Corp (NYSE:AVY)
Beneish M-Score
-2.37 (As of Today)

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.

Avery Dennison Corp has a M-score of -2.37 suggests that the company is not a manipulator.

AVY' s 10-Year Beneish M-Score Range
Min: -3.79   Max: -2.21
Current: -2.37

-3.79
-2.21

During the past 13 years, the highest Beneish M-Score of Avery Dennison Corp was -2.21. The lowest was -3.79. And the median was -2.56.


Definition

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 Avery Dennison Corp 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 * 1.0738+0.528 * 0.9908+0.404 * 1.0625+0.892 * 1.0231+0.115 * 1.0199
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.97+4.679 * -0.0027-0.327 * 0.9855
=-2.37

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $1,086 Mil.
Revenue was 1550.1 + 1583.9 + 1504.9 + 1552.3 = $6,191 Mil.
Gross Profit was 407.2 + 416.3 + 402.2 + 417.5 = $1,643 Mil.
Total Current Assets was $2,073 Mil.
Total Assets was $4,591 Mil.
Property, Plant and Equipment(Net PPE) was $919 Mil.
Depreciation, Depletion and Amortization(DDA) was $203 Mil.
Selling, General & Admin. Expense(SGA) was $1,175 Mil.
Total Current Liabilities was $1,541 Mil.
Long-Term Debt was $950 Mil.
Net Income was 71.2 + 42.7 + 46.5 + 68.8 = $229 Mil.
Non Operating Income was -7.3 + -3.7 + -25.7 + 0.3 = $-36 Mil.
Cash Flow from Operations was -108 + 224.4 + 49 + 112.4 = $278 Mil.
Accounts Receivable was $989 Mil.
Revenue was 1498.9 + 1532.2 + 1487.8 + 1532.3 = $6,051 Mil.
Gross Profit was 401.7 + 397.7 + 392 + 399.8 = $1,591 Mil.
Total Current Assets was $2,514 Mil.
Total Assets was $5,138 Mil.
Property, Plant and Equipment(Net PPE) was $940 Mil.
Depreciation, Depletion and Amortization(DDA) was $213 Mil.
Selling, General & Admin. Expense(SGA) was $1,184 Mil.
Total Current Liabilities was $2,126 Mil.
Long-Term Debt was $702 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1086.2 / 6191.2) / (988.7 / 6051.2)
=0.17544256 / 0.16338908
=1.0738

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(416.3 / 6051.2) / (407.2 / 6191.2)
=0.26295611 / 0.26540897
=0.9908

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2073 + 919) / 4591.3) / (1 - (2513.8 + 939.5) / 5137.6)
=0.34833272 / 0.3278379
=1.0625

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=6191.2 / 6051.2
=1.0231

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))
=(212.7 / (212.7 + 939.5)) / (203.1 / (203.1 + 919))
=0.18460337 / 0.18099991
=1.0199

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)
=(1174.8 / 6191.2) / (1183.8 / 6051.2)
=0.1897532 / 0.19563062
=0.97

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)
=((950.4 + 1540.5) / 4591.3) / ((702 + 2126.2) / 5137.6)
=0.54252608 / 0.5504905
=0.9855

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(229.2 - -36.4 - 277.8) / 4591.3
=-0.0027

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.

Avery Dennison Corp has a M-score of -2.37 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Avery Dennison Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.94880.94491.03511.08170.83461.04711.11640.84481.10741.0272
GMI 1.03621.09780.97821.01011.0610.96561.0181.0370.96620.9797
AQI 1.0070.95290.95681.35251.04150.88440.96550.91120.97611.0533
SGI 1.12251.02941.01871.13131.06380.88710.97131.04231.00151.0173
DEPI 1.02130.8931.02731.02190.81750.95371.00540.88171.04170.9831
SGAI 0.95990.86781.00471.03381.03681.09660.95660.9531.00570.9827
LVGI 0.93790.98270.95121.14021.0290.990.92520.95681.03970.9988
TATA -0.0459-0.0361-0.0234-0.0219-0.0393-0.2248-0.0295-0.0374-0.0448-0.0147
M-score -2.58-2.62-2.55-2.29-2.75-3.67-2.51-2.77-2.63-2.50

Avery Dennison Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.84480.86270.81580.8571.10741.01631.0111.03141.02721.0738
GMI 1.0371.01440.96830.91390.96620.95950.95620.97070.97970.9908
AQI 0.91120.92430.91790.88420.97610.99210.99561.08421.05331.0625
SGI 1.04231.03991.06271.08761.00151.01141.01681.02191.01731.0231
DEPI 0.88170.87150.88890.93851.04171.01930.9990.97090.98311.0199
SGAI 0.9530.96070.99571.03841.00571.01561.00260.98330.98270.97
LVGI 0.95680.98421.0321.05061.03971.0241.01260.95260.99880.9855
TATA -0.0374-0.0617-0.0644-0.0532-0.0448-0.0267-0.0439-0.0236-0.0147-0.0027
M-score -2.77-2.89-2.97-2.90-2.63-2.61-2.69-2.51-2.50-2.37
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide