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CA Inc (NAS:CA)
Beneish M-Score
-2.69 (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 -2.69 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: -2.69

-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 * 0.9175+0.528 * 0.9966+0.404 * 1.0721+0.892 * 0.9705+0.115 * 0.9908
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.01+4.679 * -0.0193-0.327 * 1.1433
=-2.69

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $390 Mil.
Revenue was 999 + 1009 + 1034 + 1005 = $4,047 Mil.
Gross Profit was 856 + 859 + 886 + 857 = $3,458 Mil.
Total Current Assets was $3,350 Mil.
Total Assets was $10,907 Mil.
Property, Plant and Equipment(Net PPE) was $229 Mil.
Depreciation, Depletion and Amortization(DDA) was $361 Mil.
Selling, General & Admin. Expense(SGA) was $1,387 Mil.
Total Current Liabilities was $2,638 Mil.
Long-Term Debt was $1,946 Mil.
Net Income was 198 + 174 + 223 + 174 = $769 Mil.
Non Operating Income was 0 + -12 + 0 + -4 = $-16 Mil.
Cash Flow from Operations was 161 + 448 + 336 + 50 = $995 Mil.
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.



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)
=(390 / 4047) / (438 / 4170)
=0.09636768 / 0.10503597
=0.9175

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)
=(3551 / 4170) / (3458 / 4047)
=0.85155875 / 0.85446009
=0.9966

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 - (3350 + 229) / 10907) / (1 - (3745 + 252) / 10707)
=0.67186211 / 0.62669282
=1.0721

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
=4047 / 4170
=0.9705

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))
=(388 / (388 + 252)) / (361 / (361 + 229))
=0.60625 / 0.61186441
=0.9908

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)
=(1387 / 4047) / (1415 / 4170)
=0.342723 / 0.33932854
=1.01

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 + 2638) / 10907) / ((1250 + 2686) / 10707)
=0.42028055 / 0.36760997
=1.1433

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
=(769 - -16 - 995) / 10907
=-0.0193

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 -2.69 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

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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.90350.96290.76211.06520.82790.93260.94290.911.01410.9175
GMI 1.00871.00681.00561.00231.00221.00141.00031.00030.99520.9966
AQI 0.95450.92630.94841.00711.02981.03311.0991.0561.07621.0721
SGI 0.97960.98470.98930.99610.9660.95080.93940.93430.94440.9705
DEPI 1.02341.033411.01970.95090.96860.99361.00451.02560.9908
SGAI 0.93880.95230.99661.02270.99241.00761.02411.02751.01171.01
LVGI 1.05661.07871.0020.92720.88570.89050.96771.1371.13291.1433
TATA 0.0048-0.0172-0.0123-0.0075-0.0089-0.0133-0.0209-0.0243-0.0202-0.0193
M-score -2.58-2.65-2.78-2.43-2.66-2.60-2.64-2.76-2.63-2.69
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