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B/E Aerospace Inc (NAS:BEAV)
Beneish M-Score
-2.49 (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 -2.49 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: -2.49

-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 -2.27.


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 * 1.0603+0.528 * 0.9943+0.404 * 0.9988+0.892 * 1.0472+0.115 * 1.2521
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9865+4.679 * -0.029-0.327 * 1.0017
=-2.49

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $421 Mil.
Revenue was 753.1 + 716.7 + 659.2 + 679.8 = $2,809 Mil.
Gross Profit was 305.3 + 280.1 + 262.8 + 255.4 = $1,104 Mil.
Total Current Assets was $1,777 Mil.
Total Assets was $3,252 Mil.
Property, Plant and Equipment(Net PPE) was $388 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $359 Mil.
Total Current Liabilities was $853 Mil.
Long-Term Debt was $2,045 Mil.
Net Income was 84.8 + 82.6 + 83.4 + 45.8 = $297 Mil.
Non Operating Income was 0 + 0 + 143.9 + -48 = $96 Mil.
Cash Flow from Operations was 82 + 12.1 + 120.4 + 80.5 = $295 Mil.
Accounts Receivable was $379 Mil.
Revenue was 700.6 + 690 + 637.9 + 653.7 = $2,682 Mil.
Gross Profit was 280.5 + 288.4 + 248.8 + 230.1 = $1,048 Mil.
Total Current Assets was $1,808 Mil.
Total Assets was $3,333 Mil.
Property, Plant and Equipment(Net PPE) was $409 Mil.
Depreciation, Depletion and Amortization(DDA) was $121 Mil.
Selling, General & Admin. Expense(SGA) was $347 Mil.
Total Current Liabilities was $826 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)
=(420.6 / 2808.8) / (378.8 / 2682.2)
=0.14974366 / 0.14122735
=1.0603

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)
=(1047.8 / 2682.2) / (1103.6 / 2808.8)
=0.39064947 / 0.392908
=0.9943

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 - (1776.6 + 387.5) / 3252.1) / (1 - (1807.6 + 408.7) / 3332.5)
=0.33455306 / 0.33494374
=0.9988

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
=2808.8 / 2682.2
=1.0472

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))
=(120.6 / (120.6 + 408.7)) / (86.2 / (86.2 + 387.5))
=0.2278481 / 0.18197171
=1.2521

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)
=(358.8 / 2808.8) / (347.3 / 2682.2)
=0.12774138 / 0.12948326
=0.9865

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)
=((2044.6 + 853.3) / 3252.1) / ((2138.7 + 825.7) / 3332.5)
=0.89108576 / 0.88954239
=1.0017

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
=(296.6 - 95.9 - 295) / 3252.1
=-0.029

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 -2.49 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 0.98070.84790.98990.89271.25260.92671.57431.04710.50491.1711
GMI 0.99641.03420.9910.99290.95110.96950.89561.01561.05320.9818
AQI 1.0770.80891.0761.00641.0840.89381.05990.9290.96880.9679
SGI 1.33661.48711.25770.91831.0241.25990.76581.1511.17961.0503
DEPI 1.08060.92630.88890.86061.27861.02921.15721.14140.65971.4723
SGAI 0.87540.82250.97071.23611.05310.95161.17960.88970.91170.9864
LVGI 0.86660.50242.14490.85881.04250.95681.12040.93521.85360.9845
TATA 0.04270.1005-0.03940.0221-0.041-0.0232-0.0077-0.00240.0306-0.0077
M-score -1.89-1.59-2.80-2.56-2.40-2.46-2.28-2.28-2.92-2.27

B/E Aerospace Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.17041.67691.87450.50480.47570.37980.32891.17121.13571.0603
GMI 0.98220.94670.96311.05321.07441.12441.09390.98171.00760.9943
AQI 1.01061.17541.14840.96880.86590.75440.79640.96791.01210.9988
SGI 0.99830.86940.71581.17961.31841.47511.70991.05021.04231.0472
DEPI 1.25091.37411.12070.65970.62890.62850.79841.47231.3931.2521
SGAI 0.91240.93860.98910.91170.91920.87880.86780.98640.96750.9865
LVGI 0.93251.04721.06581.85361.85151.6371.6440.98450.97791.0017
TATA 0.00140.01220.0195-0.0087-0.0125-0.0393-0.0474-0.0385-0.0282-0.029
M-score -2.26-1.84-1.80-3.10-3.06-3.07-2.93-2.42-2.38-2.49
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