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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.
During the past 9 years, the highest Beneish M-Score of Brookfield Infrastructure Partners LP was 39.06. The lowest was -2.97. And the median was -2.41.
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 Brookfield Infrastructure Partners LP 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 * 1.2994||+||0.528 * 1.0002||+||0.404 * 1.192||+||0.892 * 0.974||+||0.115 * 0.9733|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1389||+||4.679 * -0.0298||-||0.327 * 1.0659|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $443 Mil.|
Revenue was 462 + 454 + 455 + 468 = $1,839 Mil.
Gross Profit was 264 + 252 + 256 + 269 = $1,041 Mil.
Total Current Assets was $2,719 Mil.
Total Assets was $20,443 Mil.
Property, Plant and Equipment(Net PPE) was $7,583 Mil.
Depreciation, Depletion and Amortization(DDA) was $387 Mil.
Selling, General & Admin. Expense(SGA) was $142 Mil.
Total Current Liabilities was $923 Mil.
Long-Term Debt was $8,881 Mil.
Net Income was 116 + 61 + 29 + 92 = $298 Mil.
Non Operating Income was 145 + 67 + -40 + 142 = $314 Mil.
Cash Flow from Operations was 159 + 162 + 92 + 181 = $594 Mil.
|Accounts Receivable was $350 Mil.
Revenue was 466 + 466 + 465 + 491 = $1,888 Mil.
Gross Profit was 269 + 263 + 262 + 275 = $1,069 Mil.
Total Current Assets was $2,015 Mil.
Total Assets was $16,952 Mil.
Property, Plant and Equipment(Net PPE) was $7,882 Mil.
Depreciation, Depletion and Amortization(DDA) was $391 Mil.
Selling, General & Admin. Expense(SGA) was $128 Mil.
Total Current Liabilities was $1,249 Mil.
Long-Term Debt was $6,378 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(443 / 1839)||/||(350 / 1888)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1069 / 1888)||/||(1041 / 1839)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2719 + 7583) / 20443)||/||(1 - (2015 + 7882) / 16952)|
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.
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))|
|=||(391 / (391 + 7882))||/||(387 / (387 + 7583))|
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)|
|=||(142 / 1839)||/||(128 / 1888)|
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)|
|=||((8881 + 923) / 20443)||/||((6378 + 1249) / 16952)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(298 - 314||-||594)||/||20443|
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.
Brookfield Infrastructure Partners LP has a M-score of -2.34 suggests that the company will not be a manipulator.
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
Brookfield Infrastructure Partners LP Annual Data
Brookfield Infrastructure Partners LP Quarterly Data