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CA Inc (NAS:CA)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

CA' s 10-Year Beneish M-Score Range
Min: -3.94   Max: -1.18
Current: -2.76

-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 * 0.7742+0.528 * 1.0069+0.404 * 0.9484+0.892 * 0.9739+0.115 * 0.9999
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9957+4.679 * -0.0077-0.327 * 1.002
=-2.76

* 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 $428 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 1105 + 1095 + 1118 + 1195 = $4,513 Mil.
Gross Profit was 946 + 939 + 958 + 1031 = $3,874 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 $471 Mil.
Selling, General & Admin. Expense(SGA) was $1,547 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 / 4513)
=0.09761092 / 0.12608021
=0.7742

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 / 4513) / (920 / 4395)
=0.85840904 / 0.85255973
=1.0069

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 / 4513
=0.9739

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))
=(471 / (471 + 306)) / (428 / (428 + 278))
=0.60617761 / 0.60623229
=0.9999

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) / (1547 / 4513)
=0.34129693 / 0.3427875
=0.9957

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 -2.76 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 0.7470.67571.67580.92480.86620.98270.96140.98050.99540.955
GMI 0.99411.08111.01430.99961.03220.94261.01241.00281.00511.0086
AQI 0.92991.17140.90630.93821.02391.05880.97821.04020.97980.9545
SGI 1.07531.05271.04531.08470.99860.98971.04781.08690.95760.9794
DEPI 1.00211.00460.92661.45630.85951.05230.8450.91150.84311.0228
SGAI 0.98511.06020.97760.90990.88911.0020.99630.98310.94410.9401
LVGI 1.14760.95881.16240.96780.85110.91380.97541.00140.97051.0566
TATA -0.1118-0.1175-0.0836-0.0508-0.0371-0.0495-0.0446-0.0439-0.03720.0104
M-score -3.25-3.17-2.30-2.66-2.70-2.71-2.69-2.62-2.70-2.51

CA Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.80110.98980.97490.99541.1161.0250.82780.96960.9780.7742
GMI 1.00211.0011.00591.00511.00651.00841.00711.00991.00811.0069
AQI 1.04230.99430.96990.97980.98180.93440.96570.95450.92630.9484
SGI 1.06041.02440.98440.95760.95080.95050.95750.96460.96950.9739
DEPI 0.89850.91290.91510.84310.86430.89790.88421.02281.03270.9999
SGAI 0.97560.94470.96750.94410.93230.91850.90310.93970.95260.9957
LVGI 1.00341.04691.0270.97050.97981.00651.01691.05661.07871.002
TATA -0.0511-0.0429-0.0574-0.0355-0.0135-0.0132-0.0030.0104-0.0134-0.0077
M-score -2.84-2.69-2.81-2.69-2.48-2.58-2.70-2.51-2.63-2.76
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