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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-1.94 (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 -1.94 signals that the company is a manipulator.

BEAV' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.46
Current: -1.94

-3.33
-1.46

During the past 13 years, the highest Beneish M-Score of B/E Aerospace Inc was -1.46. The lowest was -3.33. And the median was -2.27.


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 * 1.2221+0.528 * 1.0033+0.404 * 1.1754+0.892 * 1.193+0.115 * 1.3741
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9847+4.679 * 0.0122-0.327 * 1.0472
=-1.94

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $676 Mil.
Revenue was 1089.5 + 1011.2 + 903.1 + 888.1 = $3,892 Mil.
Gross Profit was 406.6 + 376.7 + 340.7 + 342.3 = $1,466 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 $523 Mil.
Total Current Liabilities was $1,095 Mil.
Long-Term Debt was $2,627 Mil.
Net Income was 108.6 + 109 + 90.6 + 92.7 = $401 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 11.4 + 56.3 + 139.7 + 110 = $317 Mil.
Accounts Receivable was $464 Mil.
Revenue was 850.3 + 842.2 + 803.2 + 766.7 = $3,262 Mil.
Gross Profit was 326.8 + 319.1 + 299 + 288.3 = $1,233 Mil.
Total Current Assets was $2,990 Mil.
Total Assets was $5,345 Mil.
Property, Plant and Equipment(Net PPE) was $336 Mil.
Depreciation, Depletion and Amortization(DDA) was $82 Mil.
Selling, General & Admin. Expense(SGA) was $445 Mil.
Total Current Liabilities was $814 Mil.
Long-Term Debt was $1,960 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)
=(676.2 / 3891.9) / (463.8 / 3262.4)
=0.17374547 / 0.14216528
=1.2221

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)
=(376.7 / 3262.4) / (406.6 / 3891.9)
=0.37800392 / 0.37675685
=1.0033

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 - (3149.1 + 658.8) / 6848.4) / (1 - (2989.7 + 336.4) / 5344.9)
=0.44397231 / 0.37770585
=1.1754

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
=3891.9 / 3262.4
=1.193

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))
=(82.4 / (82.4 + 336.4)) / (110.1 / (110.1 + 658.8))
=0.19675263 / 0.14319157
=1.3741

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)
=(522.5 / 3891.9) / (444.8 / 3262.4)
=0.13425319 / 0.13634134
=0.9847

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)
=((2627 + 1094.5) / 6848.4) / ((1959.8 + 813.8) / 5344.9)
=0.5434116 / 0.51892458
=1.0472

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
=(400.9 - 0 - 317.4) / 6848.4
=0.0122

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 -1.94 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97111.25130.98070.84790.98990.89271.25260.92670.97681.0673
GMI 0.84060.92930.99641.03420.9910.99290.95110.96950.99270.9891
AQI 1.03460.77351.0770.80891.0761.00641.0840.89381.05990.929
SGI 1.17471.15081.33661.48711.25770.91831.0241.25991.23421.1291
DEPI 0.97010.95441.08060.92630.88890.86061.27861.02921.15721.1414
SGAI 0.95910.99440.87540.82250.97071.23611.05310.95161.00180.9805
LVGI 0.84420.73180.86660.50242.14490.85881.04250.95681.12040.9352
TATA -0.01320.0920.04270.0645-0.07460.0221-0.041-0.0232-0.0077-0.0024
M-score -2.43-1.73-1.89-1.76-2.96-2.56-2.40-2.46-2.33-2.31

B/E Aerospace Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.00490.97321.02510.97680.95090.94330.96491.06731.01731.2221
GMI 0.97050.98580.98680.99270.99860.99680.99140.98910.99381.0033
AQI 0.95990.96241.07241.05990.98180.98650.92170.9291.01061.1754
SGI 1.2481.24941.23041.23421.20151.16261.15221.12911.14861.193
DEPI 1.11341.12431.1711.15721.10241.09371.14821.14141.25091.3741
SGAI 0.96550.95770.97571.00180.97950.97570.96750.98050.97460.9847
LVGI 1.08381.09661.13261.12040.99770.9830.92420.93520.93251.0472
TATA -0.0127-0.01050.0004-0.0077-0.0057-0.0003-0.0074-0.00240.00140.0122
M-score -2.35-2.36-2.25-2.33-2.36-2.38-2.40-2.31-2.27-1.94
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