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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.
During the past 13 years, the highest Beneish M-Score of Aspen Technology Inc was -1.26. The lowest was -5.05. And the median was -3.00.
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 * 1.1928||+||0.528 * 0.9911||+||0.404 * 2.9808||+||0.892 * 1.0171||+||0.115 * 0.9159|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9761||+||4.679 * -0.1126||-||0.327 * 1.7402|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $17.9 Mil.|
Revenue was 119.933 + 120.05 + 113.68 + 119.217 = $472.9 Mil.
Gross Profit was 108.354 + 108.544 + 101.949 + 107.197 = $426.0 Mil.
Total Current Assets was $168.4 Mil.
Total Assets was $267.4 Mil.
Property, Plant and Equipment(Net PPE) was $15.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.3 Mil.
Selling, General & Admin. Expense(SGA) was $143.8 Mil.
Total Current Liabilities was $395.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 37.01 + 35 + 33.326 + 33.171 = $138.5 Mil.
Non Operating Income was 0.697 + 0.646 + 1.976 + -2.686 = $0.6 Mil.
Cash Flow from Operations was 27.167 + 26.25 + 44.849 + 69.723 = $168.0 Mil.
|Accounts Receivable was $14.8 Mil.
Revenue was 119.151 + 120.296 + 114.186 + 111.299 = $464.9 Mil.
Gross Profit was 107.263 + 107.324 + 101.565 + 98.99 = $415.1 Mil.
Total Current Assets was $230.2 Mil.
Total Assets was $276.4 Mil.
Property, Plant and Equipment(Net PPE) was $17.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.4 Mil.
Selling, General & Admin. Expense(SGA) was $144.8 Mil.
Total Current Liabilities was $234.7 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)|
|=||(17.927 / 472.88)||/||(14.777 / 464.932)|
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)|
|=||(415.142 / 464.932)||/||(426.044 / 472.88)|
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 - (168.409 + 14.992) / 267.357)||/||(1 - (230.226 + 17.049) / 276.393)|
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))|
|=||(6.378 / (6.378 + 17.049))||/||(6.341 / (6.341 + 14.992))|
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)|
|=||(143.793 / 472.88)||/||(144.84 / 464.932)|
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 + 395) / 267.357)||/||((0 + 234.659) / 276.393)|
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|
|=||(138.507 - 0.633||-||167.989)||/||267.357|
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 -2.27 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