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Aspen Technology, Inc. (NAS:AZPN)
Beneish M-Score
-4.13 (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 -4.13 suggests that the company is not a manipulator.

AZPN' s 10-Year Beneish M-Score Range
Min: -4.97   Max: -1.33
Current: -4.13

-4.97
-1.33

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.


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 * 0.4558+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
=-4.13

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

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

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)
=(35.66 / 348.955) / (61.46 / 274.12)
=0.10219083 / 0.22420838
=0.4558

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)
=(75.487 / 274.12) / (86.326 / 348.955)
=0.81671531 / 0.85626227
=0.9538

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 - (291.209 + 7.123) / 358.911) / (1 - (251.577 + 7.727) / 345.438)
=0.16878558 / 0.24934721
=0.6769

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
=348.955 / 274.12
=1.273

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))
=0.40556966 / 0.4134552
=0.9809

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)
=0.41149432 / 0.53312053
=0.7719

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)
=0.59393554 / 0.50896253
=1.167

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
=(69.174 - -2.118 - 164.678) / 358.911
=-0.2602

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.


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

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 0.74650.90560.95522.17461.14860.82811.35530.64010.69840.5676
GMI 0.93331.06760.90070.92520.99780.96111.25570.81890.93740.9364
AQI 0.86660.98681.05710.99151.01181.07670.87221.06350.73760.8634
SGI 0.96110.81081.08611.16290.91370.99990.53391.19121.2271.2807
DEPI 0.85050.8510.96351.37521.35170.81511.06061.01411.03191.0703
SGAI 0.57711.34250.79660.9861.16910.92322.10810.78480.81570.7443
LVGI 0.87011.07510.85711.36690.81490.78911.13410.86921.19731.0594
TATA -0.1806-0.3378-0.0064-0.0179-0.08880.0421-0.364-0.1359-0.312-0.2617
M-score -3.58-4.39-2.43-1.46-2.76-2.37-4.42-3.26-4.18-3.91

Aspen Technology, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.60840.68790.70450.69840.57470.60770.52070.56760.66280.4558
GMI 0.85440.87040.91740.93740.92110.93740.92540.93640.95290.9538
AQI 1.08891.04341.02050.73760.7370.71181.08790.86340.7170.6769
SGI 1.21591.26171.26131.2271.27671.22911.26051.28071.24351.273
DEPI 0.93850.86160.84791.03191.17131.18311.16971.07031.0140.9809
SGAI 0.77670.79830.80070.81570.74590.77880.74540.74430.79530.7719
LVGI 0.93320.89560.9661.19731.10031.15441.09971.05941.10911.167
TATA -0.1179-0.1067-0.1452-0.312-0.3356-0.3493-0.3136-0.2617-0.263-0.2602
M-score -3.19-3.03-3.21-4.18-4.31-4.41-4.13-3.91-3.94-4.13
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