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Aircastle Ltd (NYSE:AYR)
Beneish M-Score
-2.83 (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 -2.83 suggests that the company is not a manipulator.

AYR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.7   Max: 2.32
Current: -2.83

-3.7
2.32

During the past 11 years, the highest Beneish M-Score of Aircastle Ltd was 2.32. The lowest was -3.70. And the median was -2.73.


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 * 0.7111+0.528 * 1.0036+0.404 * 1.2582+0.892 * 1.0995+0.115 * 1.0704
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9202+4.679 * -0.0633-0.327 * 1.0271
=-2.83

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $3.0 Mil.
Revenue was 212.074 + 204.565 + 194.296 + 238.257 = $849.2 Mil.
Gross Profit was 209.554 + 200.902 + 191.353 + 236.24 = $838.0 Mil.
Total Current Assets was $236.3 Mil.
Total Assets was $6,488.4 Mil.
Property, Plant and Equipment(Net PPE) was $5,885.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $311.7 Mil.
Selling, General & Admin. Expense(SGA) was $56.6 Mil.
Total Current Liabilities was $214.7 Mil.
Long-Term Debt was $3,995.2 Mil.
Net Income was -13.989 + 41.808 + 43.269 + 72.764 = $143.9 Mil.
Non Operating Income was 15.749 + 21.379 + 6.247 + 10.211 = $53.6 Mil.
Cash Flow from Operations was 158.864 + 116.678 + 132.928 + 92.811 = $501.3 Mil.
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.



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)
=(3.046 / 849.192) / (3.896 / 772.333)
=0.00358694 / 0.00504446
=0.7111

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)
=(200.902 / 772.333) / (209.554 / 849.192)
=0.99043288 / 0.98687811
=1.0036

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 - (236.345 + 5885.807) / 6488.396) / (1 - (657.626 + 5232.94) / 6167.244)
=0.056446 / 0.0448625
=1.2582

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
=849.192 / 772.333
=1.0995

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))
=(297.706 / (297.706 + 5232.94)) / (311.673 / (311.673 + 5885.807))
=0.05382843 / 0.05029028
=1.0704

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)
=(56.618 / 849.192) / (55.957 / 772.333)
=0.06667279 / 0.07245191
=0.9202

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)
=((3995.22 + 214.656) / 6488.396) / ((3685.033 + 210.997) / 6167.244)
=0.64883154 / 0.63172951
=1.0271

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
=(143.852 - 53.586 - 501.281) / 6488.396
=-0.0633

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 -2.83 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.

Aircastle Ltd Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.42750.3090.41710.950.66731.75161.35990.48661.0217
GMI 111.00691.02820.98391.00380.99940.99780.9895
AQI 1.18414.19760.42060.47280.92062.55161.53290.97080.9731
SGI 5.77952.08421.52870.97940.92491.14681.13451.03211.1552
DEPI 0.60231.11160.64710.99261.02810.93570.95551.02351.0499
SGAI 0.38550.67290.78431.00381.07560.87540.92781.07030.9035
LVGI 1.02341.10221.01410.90350.98181.02911.07720.96371.027
TATA -0.0433-0.0167-0.0477-0.0453-0.0611-0.0524-0.069-0.07-0.0555
M-score 1.18-0.90-3.01-2.92-3.18-1.27-2.15-3.26-2.58

Aircastle Ltd Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.75820.63260.48661.16170.91250.68211.02170.45590.77640.7111
GMI 1.00060.9990.99780.9950.98780.9890.98950.99281.00021.0036
AQI 1.11181.0410.97080.94650.84640.80080.97311.08721.25211.2582
SGI 1.09521.03951.03211.01611.09881.1141.15521.17941.06521.0995
DEPI 0.92421.0161.02351.17531.141.00481.04990.96941.0331.0704
SGAI 0.98321.06161.07031.09870.9980.98390.90350.8740.96320.9202
LVGI 0.89230.85760.96371.03861.01381.04341.0270.98191.04141.0271
TATA -0.0736-0.0797-0.07-0.0685-0.0716-0.0623-0.0555-0.0525-0.0539-0.0633
M-score -1.97-3.10-3.26-2.67-2.86-3.06-2.58-3.01-2.78-2.83
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