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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.52 (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 -2.52 suggests that the company is not a manipulator.

AYI' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -2.25
Current: -2.52

-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 * 1.0187+0.528 * 0.9758+0.404 * 0.8616+0.892 * 1.1311+0.115 * 1.0218
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9922+4.679 * -0.025-0.327 * 0.9722
=-2.52

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

This Year (Feb15) TTM:Last Year (Feb14) TTM:
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.
Net Income was 46.4 + 51.1 + 54.8 + 43.8 = $196 Mil.
Non Operating Income was 0.1 + 0.9 + -0.7 + 0.1 = $0 Mil.
Cash Flow from Operations was 28.8 + 46.7 + 104.3 + 71.4 = $251 Mil.
Accounts Receivable was $309 Mil.
Revenue was 546.2 + 574.7 + 579.8 + 541.5 = $2,242 Mil.
Gross Profit was 215.2 + 237.1 + 237.3 + 221.1 = $911 Mil.
Total Current Assets was $991 Mil.
Total Assets was $1,972 Mil.
Property, Plant and Equipment(Net PPE) was $147 Mil.
Depreciation, Depletion and Amortization(DDA) was $42 Mil.
Selling, General & Admin. Expense(SGA) was $639 Mil.
Total Current Liabilities was $367 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)
=(355.7 / 2536.1) / (308.7 / 2242.2)
=0.14025472 / 0.13767728
=1.0187

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)
=(273 / 2242.2) / (255.7 / 2536.1)
=0.40616359 / 0.41622964
=0.9758

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 - (1250.2 + 159.1) / 2218.1) / (1 - (990.5 + 147.1) / 1972.3)
=0.3646364 / 0.42321148
=0.8616

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
=2536.1 / 2242.2
=1.1311

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))
=(42.3 / (42.3 + 147.1)) / (44.5 / (44.5 + 159.1))
=0.22333685 / 0.21856582
=1.0218

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)
=(717.6 / 2536.1) / (639.4 / 2242.2)
=0.28295414 / 0.28516635
=0.9922

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)
=((353.7 + 434.1) / 2218.1) / ((353.6 + 366.9) / 1972.3)
=0.35516884 / 0.36530954
=0.9722

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
=(196.1 - 0.4 - 251.2) / 2218.1
=-0.025

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 -2.52 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

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
DSRI 0.97931.04971.05171.11681.09310.96051.03341.02390.98941.0187
GMI 1.00311.00971.01351.01630.9960.98960.98960.980.98530.9758
AQI 0.91250.90810.93320.93870.9080.90610.87820.8640.87010.8616
SGI 1.05181.0441.05631.08041.12481.13851.13891.14571.12991.1311
DEPI 1.07731.07031.0811.02840.98510.97240.95970.9761.021.0218
SGAI 0.97820.98211.00040.99260.98280.97690.95210.97730.98420.9922
LVGI 0.92660.9460.9410.93960.97820.95570.95630.97820.95990.9722
TATA -0.0429-0.0427-0.0434-0.004-0.0238-0.0195-0.0131-0.0258-0.0246-0.025
M-score -2.65-2.60-2.58-2.31-2.43-2.51-2.42-2.51-2.53-2.52
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