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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.10 (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 -2.10 signals that the company is a manipulator.

AYI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99   Max: -2.1
Current: -2.1

-2.99
-2.1

During the past 13 years, the highest Beneish M-Score of Acuity Brands Inc was -2.10. The lowest was -2.99. 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 * 1.1442+0.528 * 0.9699+0.404 * 1.3531+0.892 * 1.216+0.115 * 1.0968
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0278+4.679 * -0.0192-0.327 * 0.9607
=-2.10

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Aug16) TTM:Last Year (Aug15) TTM:
Accounts Receivable was $573 Mil.
Revenue was 925.4 + 851.5 + 777.8 + 736.6 = $3,291 Mil.
Gross Profit was 402 + 377.9 + 336.9 + 319.4 = $1,436 Mil.
Total Current Assets was $1,323 Mil.
Total Assets was $2,948 Mil.
Property, Plant and Equipment(Net PPE) was $268 Mil.
Depreciation, Depletion and Amortization(DDA) was $63 Mil.
Selling, General & Admin. Expense(SGA) was $946 Mil.
Total Current Liabilities was $673 Mil.
Long-Term Debt was $355 Mil.
Net Income was 82.9 + 74 + 65.5 + 68.4 = $291 Mil.
Non Operating Income was 0.1 + -0.3 + 1.1 + 0.7 = $2 Mil.
Cash Flow from Operations was 101.8 + 124.4 + 68.4 + 51.1 = $346 Mil.
Accounts Receivable was $412 Mil.
Revenue was 759.5 + 683.7 + 616.1 + 647.4 = $2,707 Mil.
Gross Profit was 321.3 + 295.6 + 255.7 + 273 = $1,146 Mil.
Total Current Assets was $1,413 Mil.
Total Assets was $2,407 Mil.
Property, Plant and Equipment(Net PPE) was $175 Mil.
Depreciation, Depletion and Amortization(DDA) was $46 Mil.
Selling, General & Admin. Expense(SGA) was $757 Mil.
Total Current Liabilities was $521 Mil.
Long-Term Debt was $352 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)
=(572.8 / 3291.3) / (411.7 / 2706.7)
=0.17403458 / 0.15210404
=1.1442

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)
=(1145.6 / 2706.7) / (1436.2 / 3291.3)
=0.42324602 / 0.43636253
=0.9699

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 - (1322.9 + 267.8) / 2948) / (1 - (1413.4 + 174.6) / 2407)
=0.46041384 / 0.34025758
=1.3531

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
=3291.3 / 2706.7
=1.216

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))
=(45.8 / (45.8 + 174.6)) / (62.6 / (62.6 + 267.8))
=0.20780399 / 0.18946731
=1.0968

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)
=(946 / 3291.3) / (756.9 / 2706.7)
=0.28742442 / 0.27963941
=1.0278

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)
=((355 + 672.5) / 2948) / ((352.4 + 520.9) / 2407)
=0.34854138 / 0.36281678
=0.9607

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
=(290.8 - 1.6 - 345.7) / 2948
=-0.0192

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 -2.10 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 local exchange's currency.

Acuity Brands Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 0.96810.86421.03381.14280.93260.93291.11681.02390.9751.1442
GMI 0.95881.05031.05050.94241.00020.99761.01640.980.96660.9699
AQI 0.95991.0591.60470.87861.04930.91410.93870.86320.89081.3531
SGI 1.05750.80080.81780.98161.10381.07691.08041.14571.13091.216
DEPI 1.02340.87930.88070.94250.95390.98391.02840.9761.06611.0968
SGAI 0.99540.82961.02921.11020.98990.97220.99240.97730.98391.0278
LVGI 0.94310.98840.74831.16250.95550.96470.93960.97690.95570.9607
TATA -0.0584-0.0537-0.0074-0.0475-0.0341-0.0332-0.004-0.0258-0.0273-0.0192
M-score -2.75-2.96-2.31-2.75-2.58-2.65-2.31-2.51-2.55-2.10

Acuity Brands Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
DSRI 1.03341.02390.98941.01870.98170.9750.98621.1061.05261.1442
GMI 0.98960.980.98530.97580.9560.96660.96540.96690.97640.9699
AQI 0.87820.86320.87010.86160.86750.89081.13781.42941.3941.3531
SGI 1.13891.14571.12991.13111.13511.13091.13371.16621.19481.216
DEPI 0.95970.9761.021.02181.0381.06611.05951.25721.15241.0968
SGAI 0.95210.97730.98420.99221.01250.98390.99641.00331.00371.0278
LVGI 0.95630.97690.95990.97220.97010.95570.94340.93170.9350.9607
TATA -0.0131-0.0258-0.0246-0.025-0.0238-0.0273-0.0209-0.0282-0.0346-0.0192
M-score -2.42-2.51-2.53-2.52-2.55-2.55-2.41-2.16-2.23-2.10
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