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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 15.51. The lowest was -2.84. And the median was -2.36.
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 * 1.3992||+||0.528 * 1.0506||+||0.404 * 1.212||+||0.892 * 1.015||+||0.115 * 1.0896|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1898||+||4.679 * -0.0361||-||0.327 * 1.0197|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $507 Mil.|
Revenue was 522 + 462 + 454 + 455 = $1,893 Mil.
Gross Profit was 255 + 264 + 252 + 256 = $1,027 Mil.
Total Current Assets was $1,601 Mil.
Total Assets was $21,109 Mil.
Property, Plant and Equipment(Net PPE) was $8,677 Mil.
Depreciation, Depletion and Amortization(DDA) was $416 Mil.
Selling, General & Admin. Expense(SGA) was $157 Mil.
Total Current Liabilities was $1,395 Mil.
Long-Term Debt was $8,545 Mil.
Net Income was 62 + 116 + 61 + 29 = $268 Mil.
Non Operating Income was 102 + 145 + 67 + -40 = $274 Mil.
Cash Flow from Operations was 343 + 159 + 162 + 92 = $756 Mil.
|Accounts Receivable was $357 Mil.
Revenue was 468 + 466 + 466 + 465 = $1,865 Mil.
Gross Profit was 269 + 269 + 263 + 262 = $1,063 Mil.
Total Current Assets was $1,769 Mil.
Total Assets was $15,992 Mil.
Property, Plant and Equipment(Net PPE) was $7,453 Mil.
Depreciation, Depletion and Amortization(DDA) was $391 Mil.
Selling, General & Admin. Expense(SGA) was $130 Mil.
Total Current Liabilities was $1,052 Mil.
Long-Term Debt was $6,333 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)|
|=||(507 / 1893)||/||(357 / 1865)|
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)|
|=||(1063 / 1865)||/||(1027 / 1893)|
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 - (1601 + 8677) / 21109)||/||(1 - (1769 + 7453) / 15992)|
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 + 7453))||/||(416 / (416 + 8677))|
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)|
|=||(157 / 1893)||/||(130 / 1865)|
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)|
|=||((8545 + 1395) / 21109)||/||((6333 + 1052) / 15992)|
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|
|=||(268 - 274||-||756)||/||21109|
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 -2.18 signals that the company is likely to 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