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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.53 (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 -2.53 suggests that the company is not a manipulator.

AYI' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -2.25
Current: -2.53

-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 * 0.9894+0.528 * 0.9853+0.404 * 0.8701+0.892 * 1.1299+0.115 * 1.02
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9842+4.679 * -0.0246-0.327 * 0.9599
=-2.53

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
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.
Net Income was 51.1 + 54.8 + 43.8 + 32.7 = $182 Mil.
Non Operating Income was 0.9 + -0.7 + 0.1 + -0.1 = $0 Mil.
Cash Flow from Operations was 46.7 + 104.3 + 71.4 + 14 = $236 Mil.
Accounts Receivable was $333 Mil.
Revenue was 574.7 + 579.8 + 541.5 + 486.7 = $2,183 Mil.
Gross Profit was 237.1 + 237.3 + 221.1 + 189.7 = $885 Mil.
Total Current Assets was $979 Mil.
Total Assets was $1,966 Mil.
Property, Plant and Equipment(Net PPE) was $147 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $627 Mil.
Total Current Liabilities was $396 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)
=(371.8 / 2466.2) / (332.6 / 2182.7)
=0.15075825 / 0.15238008
=0.9894

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)
=(283.5 / 2182.7) / (273 / 2466.2)
=0.40555276 / 0.4116049
=0.9853

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 - (1225.5 + 160.7) / 2206.1) / (1 - (979.3 + 147.1) / 1966.2)
=0.37165133 / 0.4271183
=0.8701

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
=2466.2 / 2182.7
=1.1299

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))
=(41.4 / (41.4 + 147.1)) / (44.1 / (44.1 + 160.7))
=0.21962865 / 0.21533203
=1.02

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)
=(696.9 / 2466.2) / (626.7 / 2182.7)
=0.28258049 / 0.28712146
=0.9842

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 + 453.6) / 2206.1) / ((353.6 + 395.9) / 1966.2)
=0.36589457 / 0.38119215
=0.9599

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
=(182.4 - 0.2 - 236.4) / 2206.1
=-0.0246

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 -2.53 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

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 0.93280.97931.04971.05171.11681.09310.96051.03341.02390.9894
GMI 0.99781.00311.00971.01351.01630.9960.98960.98960.980.9853
AQI 0.91410.91250.90810.93320.93870.9080.90610.87820.8640.8701
SGI 1.07691.05181.0441.05631.08041.12481.13851.13891.14571.1299
DEPI 0.98391.07731.07031.0811.02840.98510.97240.95970.9761.02
SGAI 0.9720.97820.98211.00040.99260.98280.97690.95210.97730.9842
LVGI 0.96470.92660.9460.9410.93960.97820.95570.95630.97820.9599
TATA -0.0666-0.0429-0.0427-0.0434-0.004-0.0238-0.0195-0.0131-0.0258-0.0246
M-score -2.81-2.65-2.60-2.58-2.31-2.43-2.51-2.42-2.51-2.53
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