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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

AYI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.94   Max: -2.16
Current: -2.16

-2.94
-2.16

During the past 13 years, the highest Beneish M-Score of Acuity Brands Inc was -2.16. 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 * 1.106+0.528 * 0.9669+0.404 * 1.4294+0.892 * 1.1662+0.115 * 1.2572
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0033+4.679 * -0.0282-0.327 * 0.9317
=-2.16

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $459 Mil.
Revenue was 777.8 + 736.6 + 759.5 + 683.7 = $2,958 Mil.
Gross Profit was 336.9 + 319.4 + 321.3 + 295.6 = $1,273 Mil.
Total Current Assets was $998 Mil.
Total Assets was $2,620 Mil.
Property, Plant and Equipment(Net PPE) was $257 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $840 Mil.
Total Current Liabilities was $513 Mil.
Long-Term Debt was $354 Mil.
Net Income was 65.5 + 68.4 + 60.1 + 64.5 = $259 Mil.
Non Operating Income was 1.1 + 0.7 + -11.7 + 9.5 = $-0 Mil.
Cash Flow from Operations was 68.4 + 51.1 + 130.7 + 82.7 = $333 Mil.
Accounts Receivable was $356 Mil.
Revenue was 616.1 + 647.4 + 668.7 + 603.9 = $2,536 Mil.
Gross Profit was 255.7 + 273 + 283.5 + 243.4 = $1,056 Mil.
Total Current Assets was $1,250 Mil.
Total Assets was $2,218 Mil.
Property, Plant and Equipment(Net PPE) was $159 Mil.
Depreciation, Depletion and Amortization(DDA) was $45 Mil.
Selling, General & Admin. Expense(SGA) was $718 Mil.
Total Current Liabilities was $434 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)
=(458.8 / 2957.6) / (355.7 / 2536.1)
=0.15512578 / 0.14025472
=1.106

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)
=(1055.6 / 2536.1) / (1273.2 / 2957.6)
=0.41622964 / 0.43048418
=0.9669

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 - (997.7 + 256.6) / 2619.8) / (1 - (1250.2 + 159.1) / 2218.1)
=0.52122299 / 0.3646364
=1.4294

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
=2957.6 / 2536.1
=1.1662

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))
=(44.5 / (44.5 + 159.1)) / (54 / (54 + 256.6))
=0.21856582 / 0.17385705
=1.2572

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)
=(839.6 / 2957.6) / (717.6 / 2536.1)
=0.28387882 / 0.28295414
=1.0033

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)
=((353.5 + 513.4) / 2619.8) / ((353.7 + 434.1) / 2218.1)
=0.33090312 / 0.35516884
=0.9317

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
=(258.5 - -0.4 - 332.9) / 2619.8
=-0.0282

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 -2.16 signals that the company is likely to 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

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
DSRI 0.99680.73621.13641.03381.14280.93260.93291.11681.02390.975
GMI 0.96340.95881.05031.05050.94241.00020.99761.01640.980.9666
AQI 0.97881.06040.95861.60470.87861.04930.91410.93870.86320.882
SGI 1.10141.05750.80080.81780.98161.10381.07691.08041.14571.1309
DEPI 1.01250.81341.10620.880.94330.95390.98391.02840.9761.0661
SGAI 0.97650.99540.82961.02921.11020.98990.97220.99240.97730.9839
LVGI 1.03470.9321.00020.74831.16250.95550.96470.93960.97690.9469
TATA -0.0339-0.0582-0.0537-0.0075-0.0475-0.0341-0.0332-0.004-0.0258-0.027
M-score -2.58-2.94-2.73-2.31-2.75-2.58-2.65-2.31-2.51-2.55

Acuity Brands Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 1.09310.96051.03341.02390.98941.01870.98170.9750.98621.106
GMI 0.9960.98960.98960.980.98530.97580.9560.96660.96540.9669
AQI 0.9080.90610.87820.86320.87010.86160.86750.8821.13781.4294
SGI 1.12481.13851.13891.14571.12991.13111.13511.13091.13371.1662
DEPI 0.98510.97240.95970.9761.021.02181.0381.06611.05951.2572
SGAI 0.98280.97690.95210.97730.98420.99221.01250.98390.99641.0033
LVGI 0.97820.95570.95630.97690.95990.97220.97010.94690.94340.9317
TATA -0.0238-0.0195-0.0131-0.0258-0.0246-0.025-0.0238-0.027-0.0209-0.0282
M-score -2.43-2.51-2.42-2.51-2.53-2.52-2.55-2.55-2.41-2.16
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