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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-3.19 (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.

B/E Aerospace Inc has a M-score of -3.19 suggests that the company is not a manipulator.

BEAV' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.32
Current: -3.19

-3.33
-1.32

During the past 13 years, the highest Beneish M-Score of B/E Aerospace Inc was -1.32. The lowest was -3.33. And the median was -2.26.


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 B/E Aerospace 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 * 0.5393+0.528 * 1.0348+0.404 * 0.7544+0.892 * 1.0388+0.115 * 0.6285
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8908+4.679 * -0.0019-0.327 * 1.637
=-3.19

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $379 Mil.
Revenue was 700.6 + 690 + -604.1 + 1102.4 = $1,889 Mil.
Gross Profit was 280.5 + 288.4 + -133.5 + 366.4 = $802 Mil.
Total Current Assets was $1,808 Mil.
Total Assets was $3,333 Mil.
Property, Plant and Equipment(Net PPE) was $409 Mil.
Depreciation, Depletion and Amortization(DDA) was $121 Mil.
Selling, General & Admin. Expense(SGA) was $248 Mil.
Total Current Liabilities was $826 Mil.
Long-Term Debt was $2,139 Mil.
Net Income was 78.9 + 77.6 + -215.5 + 102.2 = $43 Mil.
Non Operating Income was 0 + 0 + -243.6 + 0 = $-244 Mil.
Cash Flow from Operations was 72.5 + 37.4 + 47.4 + 135.8 = $293 Mil.
Accounts Receivable was $676 Mil.
Revenue was 662.8 + 644.7 + -377.3 + 888.1 = $1,818 Mil.
Gross Profit was 275.6 + 261.7 + -80.9 + 342.3 = $799 Mil.
Total Current Assets was $3,149 Mil.
Total Assets was $6,848 Mil.
Property, Plant and Equipment(Net PPE) was $659 Mil.
Depreciation, Depletion and Amortization(DDA) was $110 Mil.
Selling, General & Admin. Expense(SGA) was $268 Mil.
Total Current Liabilities was $1,095 Mil.
Long-Term Debt was $2,627 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)
=(378.8 / 1888.9) / (676.2 / 1818.3)
=0.20054 / 0.37188583
=0.5393

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)
=(288.4 / 1818.3) / (280.5 / 1888.9)
=0.43925645 / 0.42447986
=1.0348

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 - (1807.6 + 408.7) / 3332.5) / (1 - (3149.1 + 658.8) / 6848.4)
=0.33494374 / 0.44397231
=0.7544

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
=1888.9 / 1818.3
=1.0388

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))
=(110.1 / (110.1 + 658.8)) / (120.6 / (120.6 + 408.7))
=0.14319157 / 0.2278481
=0.6285

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)
=(247.9 / 1888.9) / (267.9 / 1818.3)
=0.1312404 / 0.14733542
=0.8908

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)
=((2138.7 + 825.7) / 3332.5) / ((2627 + 1094.5) / 6848.4)
=0.88954239 / 0.5434116
=1.637

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
=(43.2 - -243.6 - 293.1) / 3332.5
=-0.0019

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.

B/E Aerospace Inc has a M-score of -3.19 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.

B/E Aerospace Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.25130.98070.84790.98990.89271.25260.92670.97681.68760.5061
GMI 0.92930.99641.03420.9910.99290.95110.96950.99270.91631.0532
AQI 0.77351.0770.80891.0761.00641.0840.89381.05990.9290.9675
SGI 1.15081.33661.48711.25770.91831.0241.25991.23420.71411.1796
DEPI 0.95441.08060.92630.88890.86061.27861.02921.15721.14140.6598
SGAI 0.99440.87540.82250.97071.23611.05310.95161.00181.04760.9117
LVGI 0.73180.86660.50242.14490.85881.04250.95681.12040.93521.8495
TATA 0.0920.04270.0645-0.07460.0221-0.041-0.0232-0.0077-0.00240.0303
M-score -1.73-1.89-1.76-2.96-2.56-2.40-2.46-2.33-2.16-2.92

B/E Aerospace Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.95090.94330.96491.68761.85252.61592.23370.72840.67950.5393
GMI 0.99860.99680.99140.91630.89030.86060.93970.96550.98431.0348
AQI 0.98180.98650.92170.9291.01061.17541.14840.96750.86590.7544
SGI 1.20151.16261.15220.71410.63070.55740.60070.81960.92291.0388
DEPI 1.10241.09371.14821.14141.25091.37411.12070.65980.62890.6285
SGAI 0.97950.97570.96751.04761.05941.08061.06760.93730.94450.8908
LVGI 0.99770.9830.92420.93520.93251.04721.06581.84951.85151.637
TATA -0.0057-0.0003-0.0074-0.00240.00140.01220.00970.03030.0264-0.0019
M-score -2.36-2.38-2.40-2.16-2.03-1.32-1.65-3.09-3.09-3.19
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