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Aircastle Ltd (NYSE:AYR)
Beneish M-Score
-2.75 (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 -2.75 suggests that the company is not a manipulator.

AYR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.71   Max: 2.11
Current: -2.75

-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 -2.65.


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 * 0.9242+0.528 * 0.9993+0.404 * 1.3591+0.892 * 0.9746+0.115 * 0.9391
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0636+4.679 * -0.0674-0.327 * 0.9813
=-2.75

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $4.5 Mil.
Revenue was 189.988 + 183.665 + 208.267 + 212.074 = $794.0 Mil.
Gross Profit was 187.721 + 182.262 + 205.891 + 209.554 = $785.4 Mil.
Total Current Assets was $549.2 Mil.
Total Assets was $6,945.9 Mil.
Property, Plant and Equipment(Net PPE) was $5,875.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $318.3 Mil.
Selling, General & Admin. Expense(SGA) was $58.5 Mil.
Total Current Liabilities was $135.4 Mil.
Long-Term Debt was $4,362.8 Mil.
Net Income was 20.03 + 36.262 + 50.641 + -13.989 = $92.9 Mil.
Non Operating Income was 64.771 + 77.001 + -168.502 + 76.13 = $49.4 Mil.
Cash Flow from Operations was 113.433 + 121.264 + 117.815 + 158.864 = $511.4 Mil.
Accounts Receivable was $5.0 Mil.
Revenue was 204.565 + 194.296 + 238.257 + 177.596 = $814.7 Mil.
Gross Profit was 200.902 + 191.353 + 236.24 + 176.883 = $805.4 Mil.
Total Current Assets was $474.8 Mil.
Total Assets was $6,803.7 Mil.
Property, Plant and Equipment(Net PPE) was $5,953.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $301.9 Mil.
Selling, General & Admin. Expense(SGA) was $56.4 Mil.
Total Current Liabilities was $212.8 Mil.
Long-Term Debt was $4,277.4 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)
=(4.5 / 793.994) / (4.996 / 814.714)
=0.00566755 / 0.00613221
=0.9242

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)
=(805.378 / 814.714) / (785.428 / 793.994)
=0.98854076 / 0.98921151
=0.9993

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 - (549.151 + 5875.935) / 6945.875) / (1 - (474.791 + 5953.555) / 6803.675)
=0.07497817 / 0.05516563
=1.3591

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
=793.994 / 814.714
=0.9746

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))
=(301.868 / (301.868 + 5953.555)) / (318.286 / (318.286 + 5875.935))
=0.04825701 / 0.05138435
=0.9391

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)
=(58.465 / 793.994) / (56.403 / 814.714)
=0.07363406 / 0.06923043
=1.0636

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)
=((4362.794 + 135.363) / 6945.875) / ((4277.374 + 212.83) / 6803.675)
=0.6476012 / 0.65996744
=0.9813

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
=(92.944 - 49.4 - 511.376) / 6945.875
=-0.0674

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 -2.75 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.42750.3090.41710.950.66731.75161.35990.48661.02172.5674
GMI 111.00691.02820.98391.00380.99940.99780.98951.0053
AQI 1.18414.19760.42061.49420.29131.27753.06170.97080.81731.3643
SGI 5.77952.08421.52870.97940.92491.14681.13451.03211.15521.0007
DEPI 0.60231.11160.64710.9591.06420.95390.93741.02351.04990.9881
SGAI 0.38550.67290.78431.00381.07560.87540.92781.07030.90351.0069
LVGI 1.02341.10221.01410.98980.91981.00251.07720.96371.02291.0117
TATA -0.0385-0.0144-0.047-0.0449-0.0649-0.0915-0.1075-0.07-0.056-0.0705
M-score 1.20-0.89-3.00-2.54-3.43-1.96-1.72-3.26-2.65-1.22

Aircastle Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.16170.91250.68211.02170.45590.77640.71112.56743.20260.9242
GMI 0.9950.98780.9890.98950.99281.00021.00361.00531.00240.9993
AQI 0.94650.84640.80080.81731.08721.25211.25821.36431.19251.3591
SGI 1.01611.09881.1141.15521.17941.06521.09951.00070.96680.9746
DEPI 1.17531.141.00481.04990.96941.0331.07040.98810.91580.9391
SGAI 1.09870.9980.98390.90350.8740.96320.92021.00691.07131.0636
LVGI 1.03861.01381.04341.02290.98191.04141.02711.01171.00240.9813
TATA -0.0733-0.0757-0.068-0.056-0.0522-0.0537-0.0637-0.0705-0.0697-0.0674
M-score -2.69-2.88-3.09-2.65-3.01-2.78-2.84-1.22-0.75-2.75
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