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CA Inc (NAS:CA)
Beneish M-Score
-2.64 (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 -2.64 suggests that the company is not a manipulator.

CA' s 10-Year Beneish M-Score Range
Min: -3.94   Max: -1.18
Current: -2.64

-3.94
-1.18

During the past 13 years, the highest Beneish M-Score of CA Inc was -1.18. The lowest was -3.94. And the median was -2.70.


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 * 0.9326+0.528 * 1.0014+0.404 * 1.0331+0.892 * 0.9508+0.115 * 0.9686
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0076+4.679 * -0.0204-0.327 * 0.8905
=-2.64

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $438 Mil.
Revenue was 977 + 1023 + 1091 + 1079 = $4,170 Mil.
Gross Profit was 840 + 858 + 933 + 920 = $3,551 Mil.
Total Current Assets was $3,745 Mil.
Total Assets was $10,707 Mil.
Property, Plant and Equipment(Net PPE) was $252 Mil.
Depreciation, Depletion and Amortization(DDA) was $388 Mil.
Selling, General & Admin. Expense(SGA) was $1,415 Mil.
Total Current Liabilities was $2,686 Mil.
Long-Term Debt was $1,250 Mil.
Net Income was 212 + 151 + 222 + 256 = $841 Mil.
Non Operating Income was 3 + 76 + -24 + 0 = $55 Mil.
Cash Flow from Operations was 188 + 437 + 336 + 43 = $1,004 Mil.
Accounts Receivable was $494 Mil.
Revenue was 1069 + 1084 + 1128 + 1105 = $4,386 Mil.
Gross Profit was 916 + 915 + 963 + 946 = $3,740 Mil.
Total Current Assets was $4,298 Mil.
Total Assets was $11,666 Mil.
Property, Plant and Equipment(Net PPE) was $291 Mil.
Depreciation, Depletion and Amortization(DDA) was $414 Mil.
Selling, General & Admin. Expense(SGA) was $1,477 Mil.
Total Current Liabilities was $3,562 Mil.
Long-Term Debt was $1,254 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)
=(438 / 4170) / (494 / 4386)
=0.10503597 / 0.1126311
=0.9326

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)
=(858 / 4386) / (840 / 4170)
=0.85271318 / 0.85155875
=1.0014

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 - (3745 + 252) / 10707) / (1 - (4298 + 291) / 11666)
=0.62669282 / 0.60663466
=1.0331

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
=4170 / 4386
=0.9508

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))
=(414 / (414 + 291)) / (388 / (388 + 252))
=0.58723404 / 0.60625
=0.9686

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)
=(1415 / 4170) / (1477 / 4386)
=0.33932854 / 0.33675331
=1.0076

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)
=((1250 + 2686) / 10707) / ((1254 + 3562) / 11666)
=0.36760997 / 0.41282359
=0.8905

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
=(841 - 55 - 1004) / 10707
=-0.0204

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 -2.64 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

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.67571.67580.92480.86620.98270.96140.98050.99540.92470.8279
GMI 1.08111.01430.99961.03220.94261.01241.00281.00511.01071.0022
AQI 1.17140.90630.93821.02391.05880.97821.04020.97980.95451.03
SGI 1.05271.04531.08470.99860.98971.04781.08690.95760.9570.966
DEPI 1.00460.92661.45630.85951.05230.8450.91150.84311.03390.9509
SGAI 1.06020.97760.90990.88911.0020.99630.98310.94410.93340.9924
LVGI 0.95881.16240.96780.85110.91380.97541.00140.97051.05660.8865
TATA -0.1175-0.0836-0.0508-0.0371-0.0495-0.0446-0.0439-0.0372-0.0082-0.0124
M-score -3.17-2.30-2.66-2.70-2.71-2.69-2.62-2.70-2.64-2.68

CA Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.99541.1161.0250.83430.92470.98580.78041.09120.82790.9326
GMI 1.00511.00651.00841.00791.01071.00891.00771.00451.00221.0014
AQI 0.97980.98180.93440.96570.95450.92630.94841.00711.031.0331
SGI 0.95760.95080.95050.950.9570.96180.96610.97230.9660.9508
DEPI 0.84310.86430.89790.89121.03391.04391.01031.02970.95090.9686
SGAI 0.94410.93230.91850.90290.93340.94610.98891.0140.99241.0076
LVGI 0.97050.97981.00651.01691.05661.07871.0020.92720.88650.8905
TATA -0.0355-0.0135-0.01320.0023-0.0122-0.0348-0.0304-0.0276-0.0158-0.0204
M-score -2.69-2.48-2.58-2.68-2.66-2.73-2.87-2.52-2.70-2.64
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