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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.55 (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.

Acuity Brands Inc has a M-score of -2.55 suggests that the company is not a manipulator.

AYI' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -2.25
Current: -2.55

-2.94
-2.25

During the past 13 years, the highest Beneish M-Score of Acuity Brands Inc was -2.25. The lowest was -2.94. And the median was -2.61.


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 Acuity Brands 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 * 1.0335+0.528 * 0.9897+0.404 * 0.8782+0.892 * 1.1389+0.115 * 0.9597
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9522+4.679 * -0.0408-0.327 * 0.9563
=-2.55

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $353 Mil.
Revenue was 603.9 + 546.2 + 574.7 + 579.8 = $2,305 Mil.
Gross Profit was 243.4 + 215.2 + 237.1 + 237.3 = $933 Mil.
Total Current Assets was $1,070 Mil.
Total Assets was $2,050 Mil.
Property, Plant and Equipment(Net PPE) was $148 Mil.
Depreciation, Depletion and Amortization(DDA) was $43 Mil.
Selling, General & Admin. Expense(SGA) was $646 Mil.
Total Current Liabilities was $409 Mil.
Long-Term Debt was $354 Mil.
Net Income was 43.8 + 32.7 + 44.5 + 44.9 = $166 Mil.
Non Operating Income was 0.1 + -0.1 + -0.6 + 56.8 = $56 Mil.
Cash Flow from Operations was 71.4 + 14 + 43.4 + 64.5 = $193 Mil.
Accounts Receivable was $300 Mil.
Revenue was 541.5 + 486.7 + 481.1 + 514.3 = $2,024 Mil.
Gross Profit was 221.1 + 189.7 + 189.5 + 210.5 = $811 Mil.
Total Current Assets was $837 Mil.
Total Assets was $1,830 Mil.
Property, Plant and Equipment(Net PPE) was $147 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $596 Mil.
Total Current Liabilities was $358 Mil.
Long-Term Debt was $354 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)
=(352.5 / 2304.6) / (299.5 / 2023.6)
=0.15295496 / 0.14800356
=1.0335

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)
=(215.2 / 2023.6) / (243.4 / 2304.6)
=0.40067207 / 0.40484249
=0.9897

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 - (1070 + 148.2) / 2049.8) / (1 - (837.4 + 147.1) / 1829.8)
=0.40569812 / 0.46196306
=0.8782

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
=2304.6 / 2023.6
=1.1389

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))
=(40.3 / (40.3 + 147.1)) / (42.8 / (42.8 + 148.2))
=0.21504803 / 0.22408377
=0.9597

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)
=(646.3 / 2304.6) / (596 / 2023.6)
=0.28043912 / 0.29452461
=0.9522

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)
=((353.6 + 408.7) / 2049.8) / ((353.5 + 358.1) / 1829.8)
=0.37188994 / 0.38889496
=0.9563

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
=(165.9 - 56.2 - 193.3) / 2049.8
=-0.0408

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.

Acuity Brands Inc has a M-score of -2.55 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.

Acuity Brands Inc Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
DSRI 1.01110.99680.73621.13641.03381.14280.93260.93291.1168
GMI 1.03540.96340.95881.05031.05050.94241.00020.99761.0164
AQI 0.93560.97881.06040.95861.60470.87861.04930.91410.9387
SGI 1.03261.10141.05750.80080.81780.98161.10381.07691.0804
DEPI 1.0111.01250.81341.10620.88070.94250.95390.98391.0284
SGAI 0.97820.97650.99540.82961.02921.11020.98990.97220.9924
LVGI 0.95811.03470.9321.00020.74831.16250.95550.96470.9396
TATA -0.0451-0.0337-0.0582-0.0433-0.0058-0.0601-0.0341-0.0332-0.0339
M-score -2.64-2.58-2.94-2.68-2.30-2.80-2.58-2.65-2.45

Acuity Brands Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
DSRI 0.94860.96110.93280.97931.04961.05171.11691.09320.96061.0335
GMI 1.00131.00850.99771.0031.00961.01351.01630.9960.98960.9897
AQI 0.97590.96340.91410.91250.90810.93320.93870.9080.90610.8782
SGI 1.11441.09871.0771.05191.0441.05631.08031.12481.13841.1389
DEPI 0.87220.66860.73230.79920.79661.44351.38171.32781.30650.9597
SGAI 0.97680.96870.97190.97810.98211.00040.99260.98290.9770.9522
LVGI 0.96940.98620.96470.92660.9460.9410.93960.97820.95570.9563
TATA -0.0387-0.0657-0.0548-0.0311-0.0309-0.0117-0.0339-0.0526-0.0483-0.0408
M-score -2.62-2.77-2.78-2.63-2.57-2.39-2.41-2.52-2.61-2.55
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