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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 -3.06 suggests that the company is not a manipulator.
During the past 10 years, the highest Beneish M-Score of Aircastle Ltd was 2.32. The lowest was -3.70. And the median was -2.65.
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 * 0.6821||+||0.528 * 0.989||+||0.404 * 0.8008||+||0.892 * 1.114||+||0.115 * 1.0048|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9839||+||4.679 * -0.0623||-||0.327 * 1.0434|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $3.9 Mil.|
Revenue was 177.596 + 226.146 + 176.603 + 191.988 = $772.3 Mil.
Gross Profit was 176.883 + 223.5 + 174.74 + 189.821 = $764.9 Mil.
Total Current Assets was $657.6 Mil.
Total Assets was $6,167.2 Mil.
Property, Plant and Equipment(Net PPE) was $5,232.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $297.7 Mil.
Selling, General & Admin. Expense(SGA) was $56.0 Mil.
Total Current Liabilities was $211.0 Mil.
Long-Term Debt was $3,685.0 Mil.
Net Income was 19.151 + 3.136 + 5.777 + 48.421 = $76.5 Mil.
Non Operating Income was 11.391 + -35.686 + 1.867 + 12.735 = $-9.7 Mil.
Cash Flow from Operations was 151.97 + 111.014 + 102.991 + 104.724 = $470.7 Mil.
|Accounts Receivable was $5.1 Mil.
Revenue was 170.09 + 170.378 + 176.189 + 176.61 = $693.3 Mil.
Gross Profit was 168.176 + 164.24 + 172.777 + 173.897 = $679.1 Mil.
Total Current Assets was $542.1 Mil.
Total Assets was $5,805.5 Mil.
Property, Plant and Equipment(Net PPE) was $4,938.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $282.3 Mil.
Selling, General & Admin. Expense(SGA) was $51.1 Mil.
Total Current Liabilities was $3,514.9 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(3.896 / 772.333)||/||(5.127 / 693.267)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(223.5 / 693.267)||/||(176.883 / 772.333)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (657.626 + 5232.94) / 6167.244)||/||(1 - (542.12 + 4938.113) / 5805.48)|
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.
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))|
|=||(282.344 / (282.344 + 4938.113))||/||(297.706 / (297.706 + 5232.94))|
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)|
|=||(55.957 / 772.333)||/||(51.051 / 693.267)|
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)|
|=||((3685.033 + 210.997) / 6167.244)||/||((0 + 3514.945) / 5805.48)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(76.485 - -9.693||-||470.699)||/||6167.244|
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 -3.06 suggests that the company will not be a manipulator.
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
Aircastle Ltd Annual Data
Aircastle Ltd Quarterly Data