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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-2.93 (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 -2.93 suggests that the company is not a manipulator.

BEAV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.33   Max: -1.18
Current: -2.93

-3.33
-1.18

During the past 13 years, the highest Beneish M-Score of B/E Aerospace Inc was -1.18. 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 * 0.3289+0.528 * 1.0939+0.404 * 0.7964+0.892 * 1.7099+0.115 * 0.7984
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8678+4.679 * -0.0474-0.327 * 1.644
=-2.93

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $381 Mil.
Revenue was 679.8 + 700.6 + 690 + 637.9 = $2,708 Mil.
Gross Profit was 255.4 + 280.5 + 288.4 + 248.8 = $1,073 Mil.
Total Current Assets was $1,719 Mil.
Total Assets was $3,216 Mil.
Property, Plant and Equipment(Net PPE) was $400 Mil.
Depreciation, Depletion and Amortization(DDA) was $100 Mil.
Selling, General & Admin. Expense(SGA) was $359 Mil.
Total Current Liabilities was $836 Mil.
Long-Term Debt was $2,033 Mil.
Net Income was 45.8 + 78.9 + 77.6 + -215.5 = $-13 Mil.
Non Operating Income was -48 + 0 + 0 + -50.6 = $-99 Mil.
Cash Flow from Operations was 80.5 + 72.5 + 37.4 + 47.4 = $238 Mil.
Accounts Receivable was $677 Mil.
Revenue was 653.7 + 662.8 + 644.7 + -377.3 = $1,584 Mil.
Gross Profit was 230.1 + 275.6 + 261.7 + -80.9 = $687 Mil.
Total Current Assets was $3,297 Mil.
Total Assets was $6,958 Mil.
Property, Plant and Equipment(Net PPE) was $682 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $242 Mil.
Total Current Liabilities was $1,149 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)
=(380.7 / 2708.3) / (676.9 / 1583.9)
=0.14056788 / 0.42736284
=0.3289

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)
=(280.5 / 1583.9) / (255.4 / 2708.3)
=0.43342383 / 0.39622642
=1.0939

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 - (1719.3 + 399.5) / 3215.5) / (1 - (3296.5 + 681.6) / 6958.1)
=0.34106671 / 0.42827783
=0.7964

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
=2708.3 / 1583.9
=1.7099

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))
=(129.8 / (129.8 + 681.6)) / (100.1 / (100.1 + 399.5))
=0.15997042 / 0.20036029
=0.7984

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)
=(359.4 / 2708.3) / (242.2 / 1583.9)
=0.13270317 / 0.15291369
=0.8678

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)
=((2033 + 835.7) / 3215.5) / ((2626.7 + 1149.3) / 6958.1)
=0.89214741 / 0.54267688
=1.644

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
=(-13.2 - -98.6 - 237.8) / 3215.5
=-0.0474

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 -2.93 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98070.84790.98990.89271.25260.92671.57431.04710.50611.1683
GMI 0.99641.03420.9910.99290.95110.96950.89561.01561.05320.9818
AQI 1.0770.80891.0761.00641.0840.89381.05990.9290.96751.3166
SGI 1.33661.48711.25770.91831.0241.25990.76581.1511.17961.0503
DEPI 1.08060.92630.88890.86061.27861.02921.15721.14140.65980.2635
SGAI 0.87540.82250.97071.23611.05310.95161.17960.88970.91170.9864
LVGI 0.86660.50242.14490.85881.04250.95681.12040.93521.84950.284
TATA 0.04270.0645-0.07460.0221-0.041-0.0232-0.0077-0.00240.0303-0.0077
M-score -1.89-1.76-2.96-2.56-2.40-2.46-2.28-2.28-2.92-2.05

B/E Aerospace Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.94330.96491.68761.85252.61592.86640.50610.47570.37980.3289
GMI 0.99680.99140.91630.89030.86060.87771.05321.07441.12441.0939
AQI 0.98650.92170.9291.01061.17541.14840.96750.86590.75440.7964
SGI 1.16261.15220.71410.63070.55740.46811.17961.31841.47511.7099
DEPI 1.09371.14821.14141.25091.37411.12070.65980.62890.62850.7984
SGAI 0.97570.96751.04761.05941.08061.12830.91170.91920.87880.8678
LVGI 0.9830.92420.93520.93251.04721.06581.84951.85151.6371.644
TATA -0.0003-0.0074-0.00240.00140.01220.0195-0.0086-0.0125-0.0393-0.0474
M-score -2.38-2.40-2.16-2.03-1.32-1.18-3.10-3.06-3.07-2.93
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