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CA Inc (NAS:CA)
Beneish M-Score
-2.49 (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 -2.49 suggests that the company is not a manipulator.

CA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.95   Max: -1.18
Current: -2.49

-3.95
-1.18

During the past 13 years, the highest Beneish M-Score of CA Inc was -1.18. The lowest was -3.95. 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 * 1.0221+0.528 * 0.9935+0.404 * 1.028+0.892 * 0.9912+0.115 * 0.9958
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9642+4.679 * -0.0045-0.327 * 1.0539
=-2.49

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $385 Mil.
Revenue was 1018 + 999 + 1009 + 1034 = $4,060 Mil.
Gross Profit was 879 + 856 + 859 + 886 = $3,480 Mil.
Total Current Assets was $3,178 Mil.
Total Assets was $10,687 Mil.
Property, Plant and Equipment(Net PPE) was $222 Mil.
Depreciation, Depletion and Amortization(DDA) was $342 Mil.
Selling, General & Admin. Expense(SGA) was $1,359 Mil.
Total Current Liabilities was $2,408 Mil.
Long-Term Debt was $1,946 Mil.
Net Income was 212 + 198 + 174 + 223 = $807 Mil.
Non Operating Income was -27 + 0 + -12 + 0 = $-39 Mil.
Cash Flow from Operations was -58 + 161 + 448 + 343 = $894 Mil.
Accounts Receivable was $380 Mil.
Revenue was 1005 + 977 + 1023 + 1091 = $4,096 Mil.
Gross Profit was 857 + 840 + 858 + 933 = $3,488 Mil.
Total Current Assets was $3,422 Mil.
Total Assets was $10,893 Mil.
Property, Plant and Equipment(Net PPE) was $246 Mil.
Depreciation, Depletion and Amortization(DDA) was $375 Mil.
Selling, General & Admin. Expense(SGA) was $1,422 Mil.
Total Current Liabilities was $2,562 Mil.
Long-Term Debt was $1,649 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)
=(385 / 4060) / (380 / 4096)
=0.09482759 / 0.09277344
=1.0221

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)
=(3488 / 4096) / (3480 / 4060)
=0.8515625 / 0.85714286
=0.9935

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 - (3178 + 222) / 10687) / (1 - (3422 + 246) / 10893)
=0.68185646 / 0.66326999
=1.028

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
=4060 / 4096
=0.9912

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))
=(375 / (375 + 246)) / (342 / (342 + 222))
=0.60386473 / 0.60638298
=0.9958

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)
=(1359 / 4060) / (1422 / 4096)
=0.33472906 / 0.34716797
=0.9642

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)
=((1946 + 2408) / 10687) / ((1649 + 2562) / 10893)
=0.40741087 / 0.38657854
=1.0539

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
=(807 - -39 - 894) / 10687
=-0.0045

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 -2.49 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 local exchange's currency.

CA Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.67580.92480.86620.98270.96140.98761.01140.90350.82791.0141
GMI 1.01430.99961.03220.94261.01241.00341.00641.00871.00220.9952
AQI 0.90630.93821.02391.05880.97821.04020.97980.95451.02981.0762
SGI 1.04531.08470.99860.98971.04781.0790.94250.97960.9660.9444
DEPI 0.92661.45630.85951.05230.8450.91380.84971.02340.95091.0256
SGAI 0.97760.90990.88911.0020.99630.98710.93490.93880.99241.0117
LVGI 1.16240.96780.85110.91380.97541.00140.97051.05660.88571.1329
TATA -0.0836-0.0508-0.0371-0.0495-0.0446-0.0435-0.03830.0088-0.0103-0.0203
M-score -2.30-2.66-2.70-2.71-2.69-2.61-2.70-2.56-2.67-2.63

CA Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.96290.76211.06520.82790.93260.94290.911.01410.91751.0221
GMI 1.00681.00561.00231.00221.00141.00031.00030.99520.99660.9935
AQI 0.92630.94841.00711.02981.03311.0991.0561.07621.07211.028
SGI 0.98470.98930.99610.9660.95080.93940.93430.94440.97050.9912
DEPI 1.033411.01970.95090.96860.99361.00451.02560.99080.9958
SGAI 0.95230.99661.02270.99241.00761.02411.02751.01171.010.9642
LVGI 1.07871.0020.92720.88570.89050.96771.1371.13291.14331.0539
TATA -0.0172-0.0123-0.0075-0.0089-0.0133-0.0203-0.0243-0.0202-0.0193-0.0045
M-score -2.65-2.78-2.43-2.66-2.60-2.64-2.76-2.63-2.69-2.49
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