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CA Inc (NAS:CA)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

CA' s 10-Year Beneish M-Score Range
Min: -4   Max: -1.15
Current: -2.77

-4
-1.15

During the past 13 years, the highest Beneish M-Score of CA Inc was -1.15. The lowest was -4.00. And the median was -2.74.


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 * 0.7915+0.528 * 1.0087+0.404 * 0.9484+0.892 * 0.9525+0.115 * 1.0139
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0005+4.679 * -0.0077-0.327 * 1.002
=-2.77

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $429 Mil.
Revenue was 1079 + 1069 + 1084 + 1163 = $4,395 Mil.
Gross Profit was 920 + 916 + 915 + 996 = $3,747 Mil.
Total Current Assets was $4,231 Mil.
Total Assets was $11,372 Mil.
Property, Plant and Equipment(Net PPE) was $278 Mil.
Depreciation, Depletion and Amortization(DDA) was $421 Mil.
Selling, General & Admin. Expense(SGA) was $1,500 Mil.
Total Current Liabilities was $3,290 Mil.
Long-Term Debt was $1,253 Mil.
Net Income was 256 + 217 + 107 + 232 = $812 Mil.
Non Operating Income was 0 + 0 + -208 + 0 = $-208 Mil.
Cash Flow from Operations was 35 + 174 + 470 + 429 = $1,108 Mil.
Accounts Receivable was $569 Mil.
Revenue was 1140 + 1128 + 1151 + 1195 = $4,614 Mil.
Gross Profit was 979 + 969 + 989 + 1031 = $3,968 Mil.
Total Current Assets was $3,911 Mil.
Total Assets was $11,595 Mil.
Property, Plant and Equipment(Net PPE) was $306 Mil.
Depreciation, Depletion and Amortization(DDA) was $480 Mil.
Selling, General & Admin. Expense(SGA) was $1,574 Mil.
Total Current Liabilities was $2,855 Mil.
Long-Term Debt was $1,768 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)
=(429 / 4395) / (569 / 4614)
=0.09761092 / 0.12332033
=0.7915

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)
=(916 / 4614) / (920 / 4395)
=0.85999133 / 0.85255973
=1.0087

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 - (4231 + 278) / 11372) / (1 - (3911 + 306) / 11595)
=0.60349982 / 0.63630875
=0.9484

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
=4395 / 4614
=0.9525

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))
=(480 / (480 + 306)) / (421 / (421 + 278))
=0.61068702 / 0.60228898
=1.0139

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)
=(1500 / 4395) / (1574 / 4614)
=0.34129693 / 0.34113567
=1.0005

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)
=((1253 + 3290) / 11372) / ((1768 + 2855) / 11595)
=0.39948998 / 0.39870634
=1.002

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
=(812 - -208 - 1108) / 11372
=-0.0077

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 -2.77 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 0.58480.79190.74352.2930.86621.08880.86781.00960.95980.9618
GMI 11.07721.0121.0720.9971.02250.96621.00281.00451.0092
AQI 0.93851.16780.96670.87181.01991.06030.98071.04020.97960.9547
SGI 1.07751.07541.03871.08470.99861.01921.01751.08690.96450.9724
DEPI 1.00211.00460.92661.45630.92770.90680.90860.91150.84171.0245
SGAI 1.0110.98010.96270.87510.88910.99641.00190.98310.93910.9452
LVGI 1.10981.0061.1950.93090.86250.90670.971.00140.97081.0562
TATA -0.1163-0.1184-0.091-0.0508-0.046-0.0369-0.0446-0.0439-0.03840.0104
M-score -3.40-3.05-3.18-1.37-2.76-2.50-2.82-2.59-2.73-2.51

CA Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.79720.98040.96160.95981.10011.00260.80960.96180.98440.7915
GMI 0.99161.0041.01021.00451.00551.00661.00521.00921.00831.0087
AQI 1.04230.99430.96990.97960.98180.93440.96570.95470.92630.9484
SGI 1.06551.03420.99810.96450.96460.97180.97910.97240.96330.9525
DEPI 0.89850.91170.9140.84170.86080.89120.88291.02451.03991.0139
SGAI 0.97580.94450.9670.93910.92750.91410.8990.94520.95771.0005
LVGI 1.00341.04691.0270.97080.97981.00651.01691.05621.07871.002
TATA -0.0511-0.0447-0.0592-0.0384-0.0164-0.0121-0.00190.0126-0.0111-0.0077
M-score -2.84-2.69-2.81-2.73-2.50-2.58-2.70-2.50-2.62-2.77
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