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CA Inc (NAS:CA)
Beneish M-Score
-2.63 (As of Today)

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.

CA Inc has a M-score of -2.63 suggests that the company is not a manipulator.

CA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.49   Max: -2.02
Current: -2.63

-3.49
-2.02

During the past 13 years, the highest Beneish M-Score of CA Inc was -2.02. The lowest was -3.49. And the median was -2.68.


Definition

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 CA Inc 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 * 1.0141+0.528 * 0.9952+0.404 * 1.0762+0.892 * 0.9444+0.115 * 1.0256
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0117+4.679 * -0.0202-0.327 * 1.1329
=-2.63

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $566 Mil.
Revenue was 1009 + 1034 + 1005 + 977 = $4,025 Mil.
Gross Profit was 859 + 886 + 857 + 840 = $3,442 Mil.
Total Current Assets was $3,561 Mil.
Total Assets was $11,204 Mil.
Property, Plant and Equipment(Net PPE) was $242 Mil.
Depreciation, Depletion and Amortization(DDA) was $362 Mil.
Selling, General & Admin. Expense(SGA) was $1,373 Mil.
Total Current Liabilities was $2,894 Mil.
Long-Term Debt was $1,947 Mil.
Net Income was 174 + 223 + 174 + 212 = $783 Mil.
Non Operating Income was -12 + 0 + -4 + 3 = $-13 Mil.
Cash Flow from Operations was 448 + 336 + 50 + 188 = $1,022 Mil.
Accounts Receivable was $591 Mil.
Revenue was 1023 + 1091 + 1079 + 1069 = $4,262 Mil.
Gross Profit was 858 + 933 + 920 + 916 = $3,627 Mil.
Total Current Assets was $3,986 Mil.
Total Assets was $10,973 Mil.
Property, Plant and Equipment(Net PPE) was $252 Mil.
Depreciation, Depletion and Amortization(DDA) was $402 Mil.
Selling, General & Admin. Expense(SGA) was $1,437 Mil.
Total Current Liabilities was $2,938 Mil.
Long-Term Debt was $1,247 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(566 / 4025) / (591 / 4262)
=0.14062112 / 0.13866729
=1.0141

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3627 / 4262) / (3442 / 4025)
=0.85100892 / 0.85515528
=0.9952

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3561 + 242) / 11204) / (1 - (3986 + 252) / 10973)
=0.66056765 / 0.61377928
=1.0762

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=4025 / 4262
=0.9444

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))
=(402 / (402 + 252)) / (362 / (362 + 242))
=0.6146789 / 0.59933775
=1.0256

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)
=(1373 / 4025) / (1437 / 4262)
=0.34111801 / 0.33716565
=1.0117

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)
=((1947 + 2894) / 11204) / ((1247 + 2938) / 10973)
=0.43207783 / 0.38139069
=1.1329

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(783 - -13 - 1022) / 11204
=-0.0202

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.

CA Inc has a M-score of -2.63 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

CA Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.68650.92480.86620.95430.99010.98050.98830.91010.84721.0141
GMI 1.0121.0720.9971.02250.96621.00281.00451.00921.00430.9952
AQI 0.90630.93821.02391.05880.97821.04020.97980.95451.02981.0762
SGI 1.03871.08470.99861.01921.01751.08690.96450.97240.9440.9444
DEPI 0.92661.45630.92770.90680.90860.91150.84171.02450.96121.0256
SGAI 0.96270.87510.88910.99641.00190.98310.93910.94520.98531.0117
LVGI 1.16240.96780.85110.91380.97541.00140.97051.05660.88571.1329
TATA -0.0836-0.0508-0.0461-0.0368-0.0446-0.0439-0.03830.0104-0.0124-0.0203
M-score -2.29-2.61-2.75-2.62-2.71-2.62-2.71-2.56-2.68-2.63

CA Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.84830.90350.96290.76211.06520.82790.93260.94290.911.0141
GMI 1.00941.00871.00681.00561.00231.00221.00141.00031.00030.9952
AQI 0.96570.95450.92630.94841.00711.02981.03311.0991.0561.0762
SGI 0.93430.97960.98470.98930.99610.9660.95080.93940.93430.9444
DEPI 0.8981.02341.033411.01970.95090.96860.99361.00451.0256
SGAI 0.89170.93880.95230.99661.02270.99241.00761.02411.02751.0117
LVGI 1.01691.05661.07871.0020.92720.88570.89050.96771.1371.1329
TATA 0.00120.0048-0.0172-0.0123-0.0075-0.0089-0.0133-0.0209-0.0243-0.0202
M-score -2.68-2.58-2.65-2.78-2.43-2.66-2.60-2.64-2.76-2.63
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