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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.
Brookfield Infrastructure Partners LP has a M-score of -2.85 suggests that the company is not a manipulator.
During the past 7 years, the highest Beneish M-Score of Brookfield Infrastructure Partners LP was -1.33. The lowest was -2.85. And the median was -1.93.
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 * 0.7596||+||0.528 * 0.8993||+||0.404 * 0.7601||+||0.892 * 1.2013||+||0.115 * 0.6986|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9638||+||4.679 * -0.0336||-||0.327 * 0.9825|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $313 Mil.|
Revenue was 470 + 431 + 462 + 612 = $1,975 Mil.
Gross Profit was 258 + 244 + 260 + 304 = $1,066 Mil.
Total Current Assets was $1,268 Mil.
Total Assets was $15,682 Mil.
Property, Plant and Equipment(Net PPE) was $7,763 Mil.
Depreciation, Depletion and Amortization(DDA) was $329 Mil.
Selling, General & Admin. Expense(SGA) was $110 Mil.
Total Current Liabilities was $598 Mil.
Long-Term Debt was $6,096 Mil.
Net Income was -137 + 26 + 97 + -18 = $-32 Mil.
Non Operating Income was -210 + -13 + 125 + -101 = $-199 Mil.
Cash Flow from Operations was 163 + 161 + 223 + 147 = $694 Mil.
|Accounts Receivable was $343 Mil.
Revenue was 451 + 374 + 368 + 451 = $1,644 Mil.
Gross Profit was 222 + 184 + 181 + 211 = $798 Mil.
Total Current Assets was $746 Mil.
Total Assets was $19,718 Mil.
Property, Plant and Equipment(Net PPE) was $7,970 Mil.
Depreciation, Depletion and Amortization(DDA) was $233 Mil.
Selling, General & Admin. Expense(SGA) was $95 Mil.
Total Current Liabilities was $1,291 Mil.
Long-Term Debt was $7,276 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)|
|=||(313 / 1975)||/||(343 / 1644)|
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)|
|=||(244 / 1644)||/||(258 / 1975)|
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 - (1268 + 7763) / 15682)||/||(1 - (746 + 7970) / 19718)|
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))|
|=||(233 / (233 + 7970))||/||(329 / (329 + 7763))|
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)|
|=||(110 / 1975)||/||(95 / 1644)|
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)|
|=||((6096 + 598) / 15682)||/||((7276 + 1291) / 19718)|
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|
|=||(-32 - -199||-||694)||/||15682|
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 -2.85 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