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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 -4.16 suggests that the company is not a manipulator.
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.
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 * 0.546||+||0.528 * 0.9724||+||0.404 * 0.8071||+||0.892 * 1.255||+||0.115 * 1.085|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7763||+||4.679 * -0.2991||-||0.327 * 1.1381|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $24.8 Mil.|
Revenue was 107.126 + 101.532 + 103.587 + 98.769 = $411.0 Mil.
Gross Profit was 94.745 + 88.653 + 88.299 + 86.326 = $358.0 Mil.
Total Current Assets was $308.7 Mil.
Total Assets was $378.2 Mil.
Property, Plant and Equipment(Net PPE) was $9.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.4 Mil.
Selling, General & Admin. Expense(SGA) was $139.7 Mil.
Total Current Liabilities was $242.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 28.967 + 26.678 + 20.843 + 23.263 = $99.8 Mil.
Non Operating Income was 0.188 + -0.471 + -0.472 + -0.531 = $-1.3 Mil.
Cash Flow from Operations was 39.943 + 58.242 + 69.633 + 46.343 = $214.2 Mil.
|Accounts Receivable was $36.2 Mil.
Revenue was 87.565 + 83.264 + 79.357 + 77.309 = $327.5 Mil.
Gross Profit was 75.487 + 70.276 + 66.708 + 64.936 = $277.4 Mil.
Total Current Assets was $286.9 Mil.
Total Assets was $367.1 Mil.
Property, Plant and Equipment(Net PPE) was $8.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.1 Mil.
Selling, General & Admin. Expense(SGA) was $143.4 Mil.
Total Current Liabilities was $206.9 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)|
|=||(24.775 / 411.014)||/||(36.153 / 327.495)|
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)|
|=||(88.653 / 327.495)||/||(94.745 / 411.014)|
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 - (308.656 + 9.513) / 378.235)||/||(1 - (286.88 + 7.957) / 367.059)|
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))|
|=||(5.114 / (5.114 + 7.957))||/||(5.365 / (5.365 + 9.513))|
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)|
|=||(139.682 / 411.014)||/||(143.376 / 327.495)|
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 + 242.639) / 378.235)||/||((0 + 206.902) / 367.059)|
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|
|=||(99.751 - -1.286||-||214.161)||/||378.235|
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 -4.16 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