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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.51 (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 -2.51 suggests that the company is not a manipulator.

AYI' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -2.25
Current: -2.51

-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 -2.58.


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 * 1.0239+0.528 * 0.98+0.404 * 0.864+0.892 * 1.1457+0.115 * 0.976
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9773+4.679 * -0.0258-0.327 * 0.9782
=-2.51

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $373 Mil.
Revenue was 668.7 + 603.9 + 546.2 + 574.7 = $2,394 Mil.
Gross Profit was 283.5 + 243.4 + 215.2 + 237.1 = $979 Mil.
Total Current Assets was $1,187 Mil.
Total Assets was $2,168 Mil.
Property, Plant and Equipment(Net PPE) was $153 Mil.
Depreciation, Depletion and Amortization(DDA) was $43 Mil.
Selling, General & Admin. Expense(SGA) was $680 Mil.
Total Current Liabilities was $471 Mil.
Long-Term Debt was $354 Mil.
Net Income was 54.8 + 43.8 + 32.7 + 44.5 = $176 Mil.
Non Operating Income was -0.7 + 0.1 + -0.1 + -0.6 = $-1 Mil.
Cash Flow from Operations was 104.3 + 71.4 + 14 + 43.4 = $233 Mil.
Accounts Receivable was $318 Mil.
Revenue was 579.8 + 541.5 + 486.7 + 481.1 = $2,089 Mil.
Gross Profit was 237.3 + 221.1 + 189.7 + 189.5 = $838 Mil.
Total Current Assets was $914 Mil.
Total Assets was $1,904 Mil.
Property, Plant and Equipment(Net PPE) was $148 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $608 Mil.
Total Current Liabilities was $386 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)
=(373.4 / 2393.5) / (318.3 / 2089.1)
=0.15600585 / 0.15236226
=1.0239

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)
=(243.4 / 2089.1) / (283.5 / 2393.5)
=0.4009382 / 0.409108
=0.98

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 - (1186.7 + 152.5) / 2168.1) / (1 - (913.5 + 147.9) / 1903.8)
=0.38231631 / 0.44248345
=0.864

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
=2393.5 / 2089.1
=1.1457

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))
=(40.8 / (40.8 + 147.9)) / (43.4 / (43.4 + 152.5))
=0.21621622 / 0.2215416
=0.976

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)
=(680.3 / 2393.5) / (607.6 / 2089.1)
=0.28422812 / 0.29084295
=0.9773

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 + 470.5) / 2168.1) / ((353.6 + 386.2) / 1903.8)
=0.38010239 / 0.38859124
=0.9782

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
=(175.8 - -1.3 - 233.1) / 2168.1
=-0.0258

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 -2.51 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

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
DSRI 1.01110.99680.73621.13641.03381.14280.93260.93291.11681.0239
GMI 1.03540.96340.95881.05031.05050.94241.00020.99761.01640.98
AQI 0.93560.97881.06040.95861.60470.87861.04930.91410.93870.864
SGI 1.03261.10141.05750.80080.81780.98161.10381.07691.08041.1457
DEPI 1.0111.01250.81341.10620.88070.94250.95390.98391.02840.976
SGAI 0.97820.97650.99540.82961.02921.11020.98990.97220.99240.9773
LVGI 0.95811.03470.9321.00020.74831.16250.95550.96470.93960.9782
TATA -0.0451-0.0337-0.0582-0.0433-0.0058-0.0601-0.0341-0.0666-0.004-0.0258
M-score -2.64-2.58-2.94-2.68-2.30-2.80-2.58-2.81-2.31-2.51

Acuity Brands Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 0.96110.93280.97931.04971.05171.11681.09310.96051.03341.0239
GMI 1.00850.99781.00311.00971.01351.01630.9960.98960.98960.98
AQI 0.96340.91410.91250.90810.93320.93870.9080.90610.87820.864
SGI 1.09871.07691.05181.0441.05631.08041.12481.13851.13891.1457
DEPI 0.89280.98391.07731.07031.0811.02840.98510.97240.95970.976
SGAI 0.96870.9720.97820.98211.00040.99260.98280.97690.95210.9773
LVGI 0.98620.96470.92660.9460.9410.93960.97820.95570.95630.9782
TATA -0.043-0.0666-0.0429-0.0427-0.0434-0.004-0.0238-0.0195-0.0131-0.0258
M-score -2.64-2.81-2.65-2.60-2.58-2.31-2.43-2.51-2.42-2.51
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