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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 -1.39. The lowest was -2.91. And the median was -2.03.
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 * 0.8126||+||0.528 * 0.9804||+||0.404 * 0.9793||+||0.892 * 1.0537||+||0.115 * 0.9056|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9922||+||4.679 * -0.0389||-||0.327 * 1.0778|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $268 Mil.|
Revenue was 465 + 491 + 488 + 480 = $1,924 Mil.
Gross Profit was 262 + 275 + 273 + 268 = $1,078 Mil.
Total Current Assets was $1,560 Mil.
Total Assets was $16,495 Mil.
Property, Plant and Equipment(Net PPE) was $8,084 Mil.
Depreciation, Depletion and Amortization(DDA) was $380 Mil.
Selling, General & Admin. Expense(SGA) was $115 Mil.
Total Current Liabilities was $821 Mil.
Long-Term Debt was $6,768 Mil.
Net Income was 52 + 55 + 12 + 26 = $145 Mil.
Non Operating Income was 34 + 62 + 6 + -7 = $95 Mil.
Cash Flow from Operations was 160 + 235 + 156 + 140 = $691 Mil.
|Accounts Receivable was $313 Mil.
Revenue was 470 + 431 + 462 + 463 = $1,826 Mil.
Gross Profit was 258 + 244 + 260 + 241 = $1,003 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.
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)|
|=||(268 / 1924)||/||(313 / 1826)|
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)|
|=||(275 / 1826)||/||(262 / 1924)|
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 - (1560 + 8084) / 16495)||/||(1 - (1268 + 7763) / 15682)|
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))|
|=||(329 / (329 + 7763))||/||(380 / (380 + 8084))|
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)|
|=||(115 / 1924)||/||(110 / 1826)|
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)|
|=||((6768 + 821) / 16495)||/||((6096 + 598) / 15682)|
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|
|=||(145 - 95||-||691)||/||16495|
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 -2.84 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