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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

BEAV' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.46
Current: -2.99

-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 -2.25.


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 * 0.5522+0.528 * 1.0401+0.404 * 0.8659+0.892 * 1.1356+0.115 * 0.6289
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9403+4.679 * 0.0264-0.327 * 1.8515
=-2.99

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $354 Mil.
Revenue was 690 + -604.1 + 1102.4 + 1089.5 = $2,278 Mil.
Gross Profit was 288.4 + -133.5 + 366.4 + 406.6 = $928 Mil.
Total Current Assets was $1,723 Mil.
Total Assets was $3,203 Mil.
Property, Plant and Equipment(Net PPE) was $400 Mil.
Depreciation, Depletion and Amortization(DDA) was $135 Mil.
Selling, General & Admin. Expense(SGA) was $312 Mil.
Total Current Liabilities was $803 Mil.
Long-Term Debt was $2,139 Mil.
Net Income was 77.6 + -215.5 + 102.2 + 108.6 = $73 Mil.
Non Operating Income was 0 + -243.6 + 0 + 0 = $-244 Mil.
Cash Flow from Operations was 37.4 + 47.4 + 135.8 + 11.4 = $232 Mil.
Accounts Receivable was $564 Mil.
Revenue was 644.7 + -377.3 + 888.1 + 850.3 = $2,006 Mil.
Gross Profit was 261.7 + -80.9 + 342.3 + 326.8 = $850 Mil.
Total Current Assets was $3,106 Mil.
Total Assets was $5,934 Mil.
Property, Plant and Equipment(Net PPE) was $517 Mil.
Depreciation, Depletion and Amortization(DDA) was $97 Mil.
Selling, General & Admin. Expense(SGA) was $292 Mil.
Total Current Liabilities was $985 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)
=(353.7 / 2277.8) / (564 / 2005.8)
=0.15528141 / 0.28118456
=0.5522

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)
=(-133.5 / 2005.8) / (288.4 / 2277.8)
=0.42372121 / 0.40736676
=1.0401

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 - (1723 + 399.6) / 3202.6) / (1 - (3106.1 + 516.7) / 5933.8)
=0.337226 / 0.38946375
=0.8659

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
=2277.8 / 2005.8
=1.1356

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))
=(97.3 / (97.3 + 516.7)) / (134.6 / (134.6 + 399.6))
=0.15846906 / 0.25196556
=0.6289

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)
=(312 / 2277.8) / (292.2 / 2005.8)
=0.13697427 / 0.14567754
=0.9403

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)
=((2138.6 + 803.4) / 3202.6) / ((1959.2 + 984.8) / 5933.8)
=0.91862861 / 0.49614075
=1.8515

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
=(72.9 - -243.6 - 232) / 3202.6
=0.0264

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 -2.99 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.97680.95090.94330.96491.68761.85252.11871.84610.58920.5522
GMI 0.99270.99860.99680.99140.91630.89030.91280.98081.02011.0401
AQI 1.05990.98180.98650.92170.9291.01061.17541.14840.96750.8659
SGI 1.23421.20151.16261.15220.71410.63070.68810.72681.01331.1356
DEPI 1.15721.10241.09371.14821.14141.25091.37411.12070.65980.6289
SGAI 1.00180.97950.97570.96751.04761.05941.06241.05430.93290.9403
LVGI 1.12040.99770.9830.92420.93520.93251.04721.06581.84951.8515
TATA -0.0077-0.0057-0.0003-0.0074-0.00240.00140.01220.00970.03030.0264
M-score -2.33-2.36-2.38-2.40-2.16-2.03-1.63-1.87-3.01-2.99
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