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Aspen Technology Inc (NAS:AZPN)
Beneish M-Score
-3.92 (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.

Aspen Technology Inc has a M-score of -3.93 suggests that the company is not a manipulator.

AZPN' s 10-Year Beneish M-Score Range
Min: -4.93   Max: -1.26
Current: -3.92

-4.93
-1.26

During the past 13 years, the highest Beneish M-Score of Aspen Technology Inc was -1.26. The lowest was -4.93. And the median was -2.90.


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 Aspen Technology Inc 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 * 0.5414+0.528 * 0.9794+0.404 * 1.0191+0.892 * 1.2037+0.115 * 1.768
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7957+4.679 * -0.2729-0.327 * 1.1474
=-3.93

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $19.6 Mil.
Revenue was 107.79 + 107.126 + 101.532 + 103.587 = $420.0 Mil.
Gross Profit was 95.525 + 94.745 + 88.653 + 88.299 = $367.2 Mil.
Total Current Assets was $266.0 Mil.
Total Assets was $343.4 Mil.
Property, Plant and Equipment(Net PPE) was $18.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.6 Mil.
Selling, General & Admin. Expense(SGA) was $137.5 Mil.
Total Current Liabilities was $234.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 30.464 + 28.967 + 26.678 + 20.843 = $107.0 Mil.
Non Operating Income was -0.248 + 0.188 + -0.471 + -0.472 = $-1.0 Mil.
Cash Flow from Operations was 33.832 + 39.943 + 58.242 + 69.633 = $201.7 Mil.
Accounts Receivable was $30.0 Mil.
Revenue was 98.769 + 87.565 + 83.264 + 79.357 = $349.0 Mil.
Gross Profit was 86.326 + 75.487 + 70.276 + 66.708 = $298.8 Mil.
Total Current Assets was $291.2 Mil.
Total Assets was $358.9 Mil.
Property, Plant and Equipment(Net PPE) was $7.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.0 Mil.
Selling, General & Admin. Expense(SGA) was $143.6 Mil.
Total Current Liabilities was $213.2 Mil.
Long-Term Debt was $0.0 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)
=(19.578 / 420.035) / (30.043 / 348.955)
=0.0466104 / 0.0860942
=0.5414

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)
=(94.745 / 348.955) / (95.525 / 420.035)
=0.85626227 / 0.87426524
=0.9794

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 - (265.966 + 18.327) / 343.354) / (1 - (291.209 + 7.123) / 358.911)
=0.17201198 / 0.16878558
=1.0191

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
=420.035 / 348.955
=1.2037

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))
=(5.021 / (5.021 + 7.123)) / (5.594 / (5.594 + 18.327))
=0.4134552 / 0.2338531
=1.768

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)
=(137.538 / 420.035) / (143.6 / 348.955)
=0.32744414 / 0.41151438
=0.7957

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)
=((0 + 233.995) / 343.354) / ((0 + 213.17) / 358.911)
=0.68149781 / 0.59393554
=1.1474

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
=(106.952 - -1.003 - 201.65) / 343.354
=-0.2729

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.

Aspen Technology Inc has a M-score of -3.93 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.

Aspen Technology Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 1.50130.85760.70362.01421.31721.36650.28030.91980.91830.8287
GMI 1.06760.90070.92520.99780.96111.25570.81890.93740.93640.9687
AQI 0.98681.05710.99151.01181.07670.87221.06350.73760.86340.7406
SGI 0.81081.08611.16290.91370.99990.53391.19121.2271.28071.2571
DEPI 0.8510.96351.37521.35170.81511.06061.01411.03191.07030.9831
SGAI 1.34250.79660.9861.16910.92322.10810.78480.81570.74430.7828
LVGI 1.07510.85711.36690.81490.78911.13410.86921.19731.05941.1604
TATA -0.3378-0.0064-0.0179-0.08880.0421-0.364-0.1359-0.312-0.2617-0.2747
M-score -3.84-2.52-2.81-1.96-1.92-4.41-3.60-3.98-3.59-3.83

Aspen Technology Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.81620.89640.82560.91831.26830.5970.83780.82870.5460.5414
GMI 0.92110.93740.92540.93640.95290.95380.96360.96870.97240.9794
AQI 0.7370.71181.08790.86340.7170.67690.4560.74060.80711.0191
SGI 1.27671.22911.26051.28071.24351.2731.27741.25711.2551.2037
DEPI 1.17131.18311.16971.07031.0140.98091.04950.98311.0851.768
SGAI 0.74590.77880.74540.74430.79530.77190.78660.78280.77630.7957
LVGI 1.10031.15441.09971.05941.10911.1671.17071.16041.13811.1474
TATA -0.3356-0.3493-0.3136-0.2617-0.263-0.2602-0.2448-0.2747-0.2991-0.2729
M-score -4.09-4.15-3.85-3.59-3.38-4.00-3.78-3.83-4.16-3.93
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