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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 10-Year Beneish M-Score Range
Min: -3.94   Max: -1.18
Current: -2.63

-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 * 0.9474+0.528 * 1.003+0.404 * 1.0331+0.892 * 0.9358+0.115 * 0.9763
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0007+4.679 * -0.0196-0.327 * 0.8905
=-2.63

* 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 + 35 = $996 Mil.
Accounts Receivable was $494 Mil.
Revenue was 1069 + 1084 + 1163 + 1140 = $4,456 Mil.
Gross Profit was 916 + 915 + 996 + 979 = $3,806 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 $422 Mil.
Selling, General & Admin. Expense(SGA) was $1,511 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 / 4456)
=0.10503597 / 0.11086176
=0.9474

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 / 4456) / (840 / 4170)
=0.85412926 / 0.85155875
=1.003

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 / 4456
=0.9358

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))
=(422 / (422 + 291)) / (388 / (388 + 252))
=0.59186536 / 0.60625
=0.9763

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) / (1511 / 4456)
=0.33932854 / 0.33909336
=1.0007

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 - 996) / 10707
=-0.0196

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

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.67571.67580.92480.86621.08880.86781.00960.95980.96180.8016
GMI 1.08111.01430.99961.03220.98770.96621.00281.00451.00921.0043
AQI 1.17140.90630.93821.02391.05610.98071.04020.97960.95471.03
SGI 1.05271.04531.08470.99861.01921.01751.08690.96450.97240.944
DEPI 1.00460.92661.45630.85950.97870.90860.91150.84171.02450.9612
SGAI 1.06020.97760.90990.88910.99641.00190.98310.93910.94520.9853
LVGI 0.95881.16240.96780.85110.91890.971.00140.97081.05620.8865
TATA -0.1175-0.0836-0.0508-0.0371-0.0369-0.0446-0.0439-0.03840.0104-0.0124
M-score -3.17-2.30-2.66-2.70-2.51-2.82-2.59-2.73-2.51-2.72

CA Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.95981.10011.00260.80960.96180.98440.79151.12460.80160.9474
GMI 1.00451.00551.00661.00521.00921.00831.00871.00721.00431.003
AQI 0.97960.98180.93440.96570.95470.92630.94841.00711.031.0331
SGI 0.96450.96460.97180.97910.97240.96330.95250.94350.9440.9358
DEPI 0.84170.86080.89120.88291.02451.03991.01391.03840.96120.9763
SGAI 0.93910.92750.91410.8990.94520.95771.00051.02540.98531.0007
LVGI 0.97080.97981.00651.01691.05621.07871.0020.92720.88650.8905
TATA -0.0384-0.0164-0.0121-0.00190.0126-0.0111-0.00770.0017-0.0171-0.0196
M-score -2.73-2.50-2.58-2.70-2.50-2.62-2.77-2.38-2.74-2.63
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