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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

BEAV' s 10-Year Beneish M-Score Range
Min: -3.05   Max: -1.46
Current: -2.92

-3.05
-1.46

During the past 13 years, the highest Beneish M-Score of B/E Aerospace Inc was -1.46. The lowest was -3.05. And the median was -2.29.


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 * 0.5061+0.528 * 1.0532+0.404 * 0.9675+0.892 * 1.1796+0.115 * 0.6598
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9117+4.679 * 0.0303-0.327 * 1.8495
=-2.92

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $289 Mil.
Revenue was -604.1 + 1102.4 + 1089.5 + 1011.2 = $2,599 Mil.
Gross Profit was -133.5 + 366.4 + 406.6 + 376.7 = $1,016 Mil.
Total Current Assets was $1,655 Mil.
Total Assets was $3,200 Mil.
Property, Plant and Equipment(Net PPE) was $398 Mil.
Depreciation, Depletion and Amortization(DDA) was $142 Mil.
Selling, General & Admin. Expense(SGA) was $348 Mil.
Total Current Liabilities was $781 Mil.
Long-Term Debt was $2,169 Mil.
Net Income was -215.5 + 102.2 + 108.6 + 109 = $104 Mil.
Non Operating Income was -243.6 + 0 + 0 + 0 = $-244 Mil.
Cash Flow from Operations was 47.4 + 135.8 + 11.4 + 56.3 = $251 Mil.
Accounts Receivable was $484 Mil.
Revenue was -377.3 + 888.1 + 850.3 + 842.2 = $2,203 Mil.
Gross Profit was -80.9 + 342.3 + 326.8 + 319.1 = $907 Mil.
Total Current Assets was $3,160 Mil.
Total Assets was $5,696 Mil.
Property, Plant and Equipment(Net PPE) was $426 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $324 Mil.
Total Current Liabilities was $879 Mil.
Long-Term Debt was $1,959 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)
=(289 / 2599) / (484.1 / 2203.3)
=0.11119661 / 0.21971588
=0.5061

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)
=(366.4 / 2203.3) / (-133.5 / 2599)
=0.4117914 / 0.39099654
=1.0532

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 - (1655 + 397.7) / 3199.9) / (1 - (3159.7 + 425.7) / 5696.2)
=0.3585112 / 0.37056283
=0.9675

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
=2599 / 2203.3
=1.1796

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))
=(89.6 / (89.6 + 425.7)) / (142.3 / (142.3 + 397.7))
=0.17387929 / 0.26351852
=0.6598

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)
=(347.9 / 2599) / (323.5 / 2203.3)
=0.13385918 / 0.14682522
=0.9117

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)
=((2168.5 + 780.7) / 3199.9) / ((1959.4 + 879.1) / 5696.2)
=0.9216538 / 0.49831467
=1.8495

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
=(104.3 - -243.6 - 250.9) / 3199.9
=0.0303

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 -2.92 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.02510.97680.95090.94330.96491.68761.56631.82131.60670.5061
GMI 0.98680.99270.99860.99680.99140.91630.92750.94491.00571.0532
AQI 1.07241.05990.98180.98650.92170.9291.01061.17541.14840.9675
SGI 1.23041.23421.20151.16261.15220.71410.7460.80050.83511.1796
DEPI 1.1711.15721.10241.09371.14821.14141.25091.37411.12070.6598
SGAI 0.97571.00180.97950.97570.96751.04761.02481.03161.02750.9117
LVGI 1.13261.12040.99770.9830.92420.93520.93251.04721.06581.8495
TATA 0.0004-0.0077-0.0057-0.0003-0.0074-0.00240.00140.01220.00970.0303
M-score -2.25-2.33-2.36-2.38-2.40-2.16-2.17-1.78-1.97-2.92
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