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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.
Aspen Technology, Inc. has a M-score of -4.13 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Aspen Technology, Inc. was -1.33. The lowest was -4.97. And the median was -2.96.
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 * 0.4558||+||0.528 * 0.9538||+||0.404 * 0.6769||+||0.892 * 1.273||+||0.115 * 0.9809|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7719||+||4.679 * -0.2602||-||0.327 * 1.167|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $35.7 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.
Net Income was 23.263 + 14.999 + 20.399 + 10.513 = $69.2 Mil.
Non Operating Income was -0.531 + -0.804 + -0.765 + -0.018 = $-2.1 Mil.
Cash Flow from Operations was 46.343 + 25.913 + 33.938 + 58.484 = $164.7 Mil.
|Accounts Receivable was $61.5 Mil.
Revenue was 77.309 + 71.457 + 64.017 + 61.337 = $274.1 Mil.
Gross Profit was 64.936 + 59.119 + 50.916 + 48.907 = $223.9 Mil.
Total Current Assets was $251.6 Mil.
Total Assets was $345.4 Mil.
Property, Plant and Equipment(Net PPE) was $7.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.3 Mil.
Selling, General & Admin. Expense(SGA) was $146.1 Mil.
Total Current Liabilities was $175.8 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)|
|=||(35.66 / 348.955)||/||(61.46 / 274.12)|
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)|
|=||(75.487 / 274.12)||/||(86.326 / 348.955)|
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 - (291.209 + 7.123) / 358.911)||/||(1 - (251.577 + 7.727) / 345.438)|
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))|
|=||(5.272 / (5.272 + 7.727))||/||(5.021 / (5.021 + 7.123))|
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)|
|=||(143.593 / 348.955)||/||(146.139 / 274.12)|
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 + 213.17) / 358.911)||/||((0 + 175.815) / 345.438)|
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|
|=||(69.174 - -2.118||-||164.678)||/||358.911|
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 -4.13 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
Aspen Technology, Inc. Annual Data
Aspen Technology, Inc. Quarterly Data