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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 8 years, the highest Beneish M-Score of Brookfield Infrastructure Partners LP was 15.50. The lowest was -2.99. And the median was -2.42.
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 * 0.9788||+||0.528 * 0.9856||+||0.404 * 0.957||+||0.892 * 1.0102||+||0.115 * 0.865|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1314||+||4.679 * -0.0431||-||0.327 * 1.0228|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|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.
Net Income was 18 + 99 + 52 + 55 = $224 Mil.
Non Operating Income was -11 + 115 + 34 + 62 = $200 Mil.
Cash Flow from Operations was 131 + 228 + 160 + 235 = $754 Mil.
|Accounts Receivable was $354 Mil.
Revenue was 488 + 480 + 470 + 431 = $1,869 Mil.
Gross Profit was 273 + 268 + 258 + 244 = $1,043 Mil.
Total Current Assets was $1,119 Mil.
Total Assets was $16,302 Mil.
Property, Plant and Equipment(Net PPE) was $8,094 Mil.
Depreciation, Depletion and Amortization(DDA) was $345 Mil.
Selling, General & Admin. Expense(SGA) was $112 Mil.
Total Current Liabilities was $867 Mil.
Long-Term Debt was $6,304 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)|
|=||(350 / 1888)||/||(354 / 1869)|
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)|
|=||(263 / 1869)||/||(269 / 1888)|
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 - (2015 + 7882) / 16952)||/||(1 - (1119 + 8094) / 16302)|
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))|
|=||(345 / (345 + 8094))||/||(391 / (391 + 7882))|
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)|
|=||(128 / 1888)||/||(112 / 1869)|
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)|
|=||((6378 + 1249) / 16952)||/||((6304 + 867) / 16302)|
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|
|=||(224 - 200||-||754)||/||16952|
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 -2.76 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