Switch to:
GuruFocus has detected 7 Warning Signs with Aircastle Ltd $AYR.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Aircastle Ltd (NYSE:AYR)
Beneish M-Score
-3.04 (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.

Aircastle Ltd has a M-score of -3.04 suggests that the company is not a manipulator.

AYR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.36   Max: -1.11
Current: -3.04

-3.36
-1.11

During the past 13 years, the highest Beneish M-Score of Aircastle Ltd was -1.11. The lowest was -3.36. And the median was -2.79.


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 Aircastle Ltd 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 * 0.7467+0.528 * 0.996+0.404 * 0.9932+0.892 * 0.9435+0.115 * 1.1064
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1668+4.679 * -0.0521-0.327 * 1.0242
=-3.04

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $6.0 Mil.
Revenue was 204.653 + 194.652 + 189.988 + 183.665 = $773.0 Mil.
Gross Profit was 202.384 + 192.818 + 187.721 + 182.262 = $765.2 Mil.
Total Current Assets was $514.9 Mil.
Total Assets was $7,244.7 Mil.
Property, Plant and Equipment(Net PPE) was $6,247.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $305.2 Mil.
Selling, General & Admin. Expense(SGA) was $61.9 Mil.
Total Current Liabilities was $904.1 Mil.
Long-Term Debt was $4,506.2 Mil.
Net Income was 67.724 + 27.437 + 20.03 + 36.262 = $151.5 Mil.
Non Operating Income was -137.992 + 56.712 + 64.771 + 77.001 = $60.5 Mil.
Cash Flow from Operations was 100.679 + 132.716 + 113.433 + 121.264 = $468.1 Mil.
Accounts Receivable was $8.6 Mil.
Revenue was 208.267 + 212.074 + 204.565 + 194.296 = $819.2 Mil.
Gross Profit was 205.891 + 209.554 + 200.902 + 191.353 = $807.7 Mil.
Total Current Assets was $262.6 Mil.
Total Assets was $6,570.0 Mil.
Property, Plant and Equipment(Net PPE) was $5,867.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $318.8 Mil.
Selling, General & Admin. Expense(SGA) was $56.2 Mil.
Total Current Liabilities was $749.3 Mil.
Long-Term Debt was $4,041.2 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)
=(6.035 / 772.958) / (8.566 / 819.202)
=0.00780767 / 0.01045652
=0.7467

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)
=(807.7 / 819.202) / (765.185 / 772.958)
=0.98595951 / 0.98994383
=0.996

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 - (514.852 + 6247.585) / 7244.665) / (1 - (262.607 + 5867.062) / 6569.964)
=0.06656319 / 0.06701635
=0.9932

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
=772.958 / 819.202
=0.9435

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))
=(318.783 / (318.783 + 5867.062)) / (305.216 / (305.216 + 6247.585))
=0.05153427 / 0.04657794
=1.1064

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)
=(61.872 / 772.958) / (56.198 / 819.202)
=0.08004575 / 0.06860091
=1.1668

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)
=((4506.245 + 904.106) / 7244.665) / ((4041.156 + 749.308) / 6569.964)
=0.74680486 / 0.72914616
=1.0242

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
=(151.453 - 60.492 - 468.092) / 7244.665
=-0.0521

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.

Aircastle Ltd has a M-score of -3.04 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 local exchange's currency.

Aircastle Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.320.41710.950.66731.75161.35990.48661.02172.56740.7467
GMI 11.00691.02820.98391.00380.99940.99780.98951.00530.996
AQI 4.19760.42060.47280.92062.55161.53290.97080.81731.60060.9932
SGI 2.01291.52870.97940.92491.14681.13451.03211.15521.00070.9435
DEPI 1.11490.64510.99261.02810.93570.95551.02351.04990.98811.1064
SGAI 0.6960.78431.00381.07560.87540.92781.07030.90351.00691.1668
LVGI 1.02221.09340.90350.98181.02911.07720.96371.02291.14321.0242
TATA -0.0547-0.047-0.0449-0.0978-0.0524-0.1073-0.07-0.056-0.0705-0.0496
M-score -1.11-3.03-2.92-3.36-1.27-2.33-3.26-2.65-1.17-3.02

Aircastle Ltd Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.68211.02170.45590.77640.71112.56743.20260.92421.89050.7467
GMI 0.9890.98950.99281.00021.00361.00531.00240.99930.9970.996
AQI 0.80080.81731.08721.25211.25821.60061.19251.35911.14160.9932
SGI 1.1141.15521.17941.06521.09951.00070.96680.97460.91450.9435
DEPI 1.00481.04990.96941.0331.07040.98810.91580.93911.0271.1064
SGAI 0.98390.90350.8740.96320.92021.00691.07131.06361.16691.1668
LVGI 1.04341.02290.98191.04141.02711.14321.00240.98131.00671.0242
TATA -0.068-0.056-0.0522-0.0537-0.0624-0.0739-0.073-0.0705-0.0573-0.0521
M-score -3.09-2.65-3.01-2.78-2.83-1.19-0.77-2.77-1.98-3.04
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK