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Aircastle Ltd (NYSE:AYR)
Beneish M-Score
-0.83 (As of Today)

Warning Sign:

Beneish M-Score -0.83 higher than -2.22, which implies that it might have manipulated its financial results.

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 -0.83 signals that the company is a manipulator.

AYR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.71   Max: 2.11
Current: -0.83

-3.71
2.11

During the past 12 years, the highest Beneish M-Score of Aircastle Ltd was 2.11. The lowest was -3.71. And the median was -2.60.


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 * 3.2026+0.528 * 1.0024+0.404 * 1.1925+0.892 * 0.9668+0.115 * 0.9158
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0713+4.679 * -0.0866-0.327 * 1.0024
=-0.83

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $7.4 Mil.
Revenue was 183.665 + 208.267 + 212.074 + 204.565 = $808.6 Mil.
Gross Profit was 182.262 + 205.891 + 209.554 + 200.902 = $798.6 Mil.
Total Current Assets was $743.5 Mil.
Total Assets was $6,702.8 Mil.
Property, Plant and Equipment(Net PPE) was $5,558.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $320.6 Mil.
Selling, General & Admin. Expense(SGA) was $57.8 Mil.
Total Current Liabilities was $196.4 Mil.
Long-Term Debt was $4,184.4 Mil.
Net Income was 36.262 + 50.641 + -13.989 + 41.808 = $114.7 Mil.
Non Operating Income was 77.001 + -168.502 + 76.13 + 195.926 = $180.6 Mil.
Cash Flow from Operations was 121.264 + 117.815 + 158.864 + 116.678 = $514.6 Mil.
Accounts Receivable was $2.4 Mil.
Revenue was 194.296 + 238.257 + 177.596 + 226.146 = $836.3 Mil.
Gross Profit was 191.353 + 236.24 + 176.883 + 223.5 = $828.0 Mil.
Total Current Assets was $484.3 Mil.
Total Assets was $6,524.4 Mil.
Property, Plant and Equipment(Net PPE) was $5,713.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $300.3 Mil.
Selling, General & Admin. Expense(SGA) was $55.8 Mil.
Total Current Liabilities was $210.5 Mil.
Long-Term Debt was $4,043.2 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)
=(7.388 / 808.571) / (2.386 / 836.295)
=0.00913711 / 0.00285306
=3.2026

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)
=(205.891 / 836.295) / (182.262 / 808.571)
=0.99005255 / 0.9876795
=1.0024

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 - (743.456 + 5558.666) / 6702.832) / (1 - (484.339 + 5712.95) / 6524.366)
=0.05978219 / 0.05013161
=1.1925

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
=808.571 / 836.295
=0.9668

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))
=(300.284 / (300.284 + 5712.95)) / (320.584 / (320.584 + 5558.666))
=0.04993719 / 0.05452804
=0.9158

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)
=(57.758 / 808.571) / (55.761 / 836.295)
=0.07143219 / 0.06667623
=1.0713

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)
=((4184.38 + 196.36) / 6702.832) / ((4043.237 + 210.475) / 6524.366)
=0.65356554 / 0.65197323
=1.0024

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
=(114.722 - 180.555 - 514.621) / 6702.832
=-0.0866

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 -0.83 signals that the company is likely to 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.

Aircastle Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.47010.320.41710.950.66731.75161.35990.48661.02172.5674
GMI 1111.03530.98391.00380.99940.99780.98951.0053
AQI 1.18414.19760.42061.49420.29131.27753.06170.97080.97311.1459
SGI 5.25532.01291.52870.97940.92491.14681.13451.03211.15521.0007
DEPI 0.60231.11490.64510.9591.06420.95390.93741.02351.04990.9881
SGAI 0.4210.6960.78431.00381.07560.87540.92781.07030.90351.0069
LVGI 1.02341.10221.01410.98980.91981.00251.07720.96371.0271.0077
TATA -0.0383-0.0547-0.047-0.0449-0.0649-0.0915-0.1075-0.07-0.0938-0.0705
M-score 0.77-1.13-3.01-2.54-3.43-1.96-1.72-3.26-2.76-1.31

Aircastle Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.48661.16170.91250.68211.02170.45590.77640.71112.56743.2026
GMI 0.99780.9950.98780.9890.98950.99281.00021.00361.00531.0024
AQI 0.97080.94650.84640.80080.97311.08721.25211.25821.14591.1925
SGI 1.03211.01611.09881.1141.15521.17941.06521.09951.00070.9668
DEPI 1.02351.17531.141.00481.04990.96941.0331.07040.98810.9158
SGAI 1.07031.09870.9980.98390.90350.8740.96320.92021.00691.0713
LVGI 0.96371.03861.01381.04341.0270.98191.04141.02711.00771.0024
TATA -0.0593-0.0595-0.0714-0.0601-0.0979-0.0926-0.1091-0.1236-0.0877-0.0866
M-score -3.21-2.63-2.86-3.05-2.78-3.20-3.04-3.12-1.39-0.83
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