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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.41 (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 -2.41 suggests that the company is not a manipulator.

AYI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.94   Max: -2.25
Current: -2.41

-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 * 0.9862+0.528 * 0.9654+0.404 * 1.1378+0.892 * 1.1337+0.115 * 1.0595
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9964+4.679 * -0.0217-0.327 * 0.9434
=-2.41

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $416 Mil.
Revenue was 736.6 + 759.5 + 683.7 + 616.1 = $2,796 Mil.
Gross Profit was 319.4 + 321.3 + 295.6 + 255.7 = $1,192 Mil.
Total Current Assets was $1,255 Mil.
Total Assets was $2,506 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $787 Mil.
Total Current Liabilities was $513 Mil.
Long-Term Debt was $352 Mil.
Net Income was 68.4 + 60.1 + 64.5 + 46.4 = $239 Mil.
Non Operating Income was 0.7 + 9.3 + -9.5 + 0.1 = $1 Mil.
Cash Flow from Operations was 51.1 + 130.7 + 82.7 + 28.8 = $293 Mil.
Accounts Receivable was $372 Mil.
Revenue was 647.4 + 668.7 + 603.9 + 546.2 = $2,466 Mil.
Gross Profit was 273 + 283.5 + 243.4 + 215.2 = $1,015 Mil.
Total Current Assets was $1,226 Mil.
Total Assets was $2,206 Mil.
Property, Plant and Equipment(Net PPE) was $161 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $697 Mil.
Total Current Liabilities was $454 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)
=(415.7 / 2795.9) / (371.8 / 2466.2)
=0.148682 / 0.15075825
=0.9862

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)
=(321.3 / 2466.2) / (319.4 / 2795.9)
=0.4116049 / 0.42633857
=0.9654

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 - (1255.2 + 191.3) / 2506.3) / (1 - (1225.5 + 160.7) / 2206.1)
=0.42285441 / 0.37165133
=1.1378

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
=2795.9 / 2466.2
=1.1337

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))
=(44.1 / (44.1 + 160.7)) / (48.8 / (48.8 + 191.3))
=0.21533203 / 0.20324865
=1.0595

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)
=(787.2 / 2795.9) / (696.9 / 2466.2)
=0.28155513 / 0.28258049
=0.9964

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)
=((352.4 + 512.7) / 2506.3) / ((353.6 + 453.6) / 2206.1)
=0.34517017 / 0.36589457
=0.9434

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
=(239.4 - 0.6 - 293.3) / 2506.3
=-0.0217

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 -2.41 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

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 1.01250.81341.10620.88070.94250.95390.98391.02840.9761.0661
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 -0.0337-0.0582-0.0433-0.0058-0.0601-0.0341-0.0666-0.004-0.0258-0.027
M-score -2.58-2.94-2.68-2.30-2.80-2.58-2.81-2.31-2.51-2.55

Acuity Brands Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 1.11681.09310.96051.03341.02390.98941.01870.98170.9750.9862
GMI 1.01630.9960.98960.98960.980.98530.97580.9560.96660.9654
AQI 0.93870.9080.90610.87820.86320.87010.86160.86750.8821.1378
SGI 1.08041.12481.13851.13891.14571.12991.13111.13511.13091.1337
DEPI 1.02840.98510.97240.95970.9761.021.02181.0381.06611.0595
SGAI 0.99260.98280.97690.95210.97730.98420.99221.01250.98390.9964
LVGI 0.93960.97820.95570.95630.97690.95990.97220.97010.94690.9434
TATA -0.004-0.0238-0.0195-0.013-0.0252-0.0239-0.0244-0.0152-0.0278-0.0217
M-score -2.31-2.43-2.51-2.42-2.50-2.53-2.52-2.51-2.55-2.41
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