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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

BEAV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.22   Max: -1.46
Current: -2.38

-3.22
-1.46

During the past 13 years, the highest Beneish M-Score of B/E Aerospace Inc was -1.46. The lowest was -3.22. 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 * 1.1357+0.528 * 1.0076+0.404 * 1.0121+0.892 * 1.0423+0.115 * 1.393
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9675+4.679 * -0.0282-0.327 * 0.9779
=-2.38

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $419 Mil.
Revenue was 716.7 + 659.2 + 679.8 + 700.6 = $2,756 Mil.
Gross Profit was 280.1 + 262.8 + 255.4 + 280.5 = $1,079 Mil.
Total Current Assets was $1,730 Mil.
Total Assets was $3,219 Mil.
Property, Plant and Equipment(Net PPE) was $391 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $357 Mil.
Total Current Liabilities was $832 Mil.
Long-Term Debt was $2,060 Mil.
Net Income was 82.6 + 83.4 + 45.8 + 78.9 = $291 Mil.
Non Operating Income was 0 + 143.9 + -48 + 0 = $96 Mil.
Cash Flow from Operations was 12.1 + 120.4 + 80.5 + 72.5 = $286 Mil.
Accounts Receivable was $354 Mil.
Revenue was 690 + 637.9 + 653.7 + 662.8 = $2,644 Mil.
Gross Profit was 288.4 + 248.8 + 230.1 + 275.6 = $1,043 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 $354 Mil.
Total Current Liabilities was $803 Mil.
Long-Term Debt was $2,139 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)
=(418.7 / 2756.3) / (353.7 / 2644.4)
=0.15190654 / 0.13375435
=1.1357

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)
=(262.8 / 2644.4) / (280.1 / 2756.3)
=0.39438058 / 0.39139426
=1.0076

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 - (1729.6 + 390.8) / 3219.1) / (1 - (1723 + 399.6) / 3202.6)
=0.34130658 / 0.337226
=1.0121

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
=2756.3 / 2644.4
=1.0423

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))
=(134.6 / (134.6 + 399.6)) / (86.3 / (86.3 + 390.8))
=0.25196556 / 0.18088451
=1.393

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)
=(357.1 / 2756.3) / (354.1 / 2644.4)
=0.12955774 / 0.13390561
=0.9675

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)
=((2060.2 + 831.7) / 3219.1) / ((2138.6 + 803.4) / 3202.6)
=0.89835668 / 0.91862861
=0.9779

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
=(290.7 - 95.9 - 285.5) / 3219.1
=-0.0282

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 -2.38 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 0.98070.84790.98990.89271.25260.92670.97681.06730.79831.1711
GMI 0.99641.03420.9910.99290.95110.96950.99270.98910.97560.9818
AQI 1.0770.80891.0761.00641.0840.89381.05990.9290.96880.9679
SGI 1.33661.48711.25770.91831.0241.25991.23421.12910.7461.0503
DEPI 1.08060.92630.88890.86061.27861.02921.15721.14140.65971.4723
SGAI 0.87540.82250.97071.23611.05310.95161.00180.98050.97410.9864
LVGI 0.86660.50242.14490.85881.04250.95681.12040.93521.85360.9845
TATA 0.04270.0769-0.03940.0844-0.041-0.0232-0.0077-0.00240.0306-0.0077
M-score -1.89-1.70-2.80-2.27-2.40-2.46-2.33-2.31-3.09-2.27

B/E Aerospace Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.04711.17041.67691.87450.50480.47570.37980.32891.17121.1357
GMI 1.01560.98220.94670.96311.05321.07441.12441.09390.98171.0076
AQI 0.9291.01061.17541.14840.96880.86590.75440.79640.96791.0121
SGI 1.1510.99830.86940.71581.17961.31841.47511.70991.05021.0423
DEPI 1.14141.25091.37411.12070.65970.62890.62850.79841.47231.393
SGAI 0.88970.91240.93860.98910.91170.91920.87880.86780.98640.9675
LVGI 0.93520.93251.04721.06581.85361.85151.6371.6440.98450.9779
TATA -0.00240.00140.01220.0195-0.0087-0.0125-0.0393-0.0474-0.0385-0.0282
M-score -2.28-2.26-1.84-1.80-3.10-3.06-3.07-2.93-2.42-2.38
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