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Equifax Inc (NYSE:EFX)
Beneish M-Score
-2.61 (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.

Equifax Inc has a M-score of -2.61 suggests that the company is not a manipulator.

EFX' s 10-Year Beneish M-Score Range
Min: -3.98   Max: -1.66
Current: -2.61

-3.98
-1.66

During the past 13 years, the highest Beneish M-Score of Equifax Inc was -1.66. The lowest was -3.98. And the median was -2.69.


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 Equifax 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 * 0.9982+0.528 * 0.9764+0.404 * 1.0035+0.892 * 1.0883+0.115 * 0.9466
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9433+4.679 * -0.0458-0.327 * 0.9455
=-2.61

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $337 Mil.
Revenue was 584.5 + 578.5 + 572 + 586.9 = $2,322 Mil.
Gross Profit was 377.7 + 381.3 + 375.2 + 388.7 = $1,523 Mil.
Total Current Assets was $525 Mil.
Total Assets was $4,750 Mil.
Property, Plant and Equipment(Net PPE) was $291 Mil.
Depreciation, Depletion and Amortization(DDA) was $193 Mil.
Selling, General & Admin. Expense(SGA) was $717 Mil.
Total Current Liabilities was $795 Mil.
Long-Term Debt was $1,146 Mil.
Net Income was 83.9 + 76.7 + 83.5 + 90.5 = $335 Mil.
Non Operating Income was -2.1 + -14.8 + 0.6 + 3.5 = $-13 Mil.
Cash Flow from Operations was 65 + 191.9 + 167.6 + 140.5 = $565 Mil.
Accounts Receivable was $310 Mil.
Revenue was 566.5 + 533.8 + 520 + 513.3 = $2,134 Mil.
Gross Profit was 371.4 + 337.3 + 331.6 + 326.1 = $1,366 Mil.
Total Current Assets was $485 Mil.
Total Assets was $4,387 Mil.
Property, Plant and Equipment(Net PPE) was $281 Mil.
Depreciation, Depletion and Amortization(DDA) was $170 Mil.
Selling, General & Admin. Expense(SGA) was $698 Mil.
Total Current Liabilities was $450 Mil.
Long-Term Debt was $1,446 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)
=(337.2 / 2321.9) / (310.4 / 2133.6)
=0.14522589 / 0.14548181
=0.9982

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)
=(381.3 / 2133.6) / (377.7 / 2321.9)
=0.64041995 / 0.65588527
=0.9764

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 - (524.5 + 291) / 4750.1) / (1 - (484.8 + 281.1) / 4387.2)
=0.8283194 / 0.82542396
=1.0035

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
=2321.9 / 2133.6
=1.0883

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))
=(170.2 / (170.2 + 281.1)) / (192.7 / (192.7 + 291))
=0.37713273 / 0.39838743
=0.9466

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)
=(716.7 / 2321.9) / (698.2 / 2133.6)
=0.30866962 / 0.32724034
=0.9433

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)
=((1145.6 + 794.6) / 4750.1) / ((1445.6 + 449.7) / 4387.2)
=0.40845456 / 0.43200675
=0.9455

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
=(334.6 - -12.8 - 565) / 4750.1
=-0.0458

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.

Equifax Inc has a M-score of -2.61 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.

Equifax Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98350.97631.05791.01380.81561.15160.93671.02761.05380.8791
GMI 1.01160.98670.9891.0051.00191.01670.98270.9650.96720.9626
AQI 0.99621.05910.94161.12410.99740.98630.99310.99961.03960.97
SGI 1.05131.1341.07131.19191.05030.88651.08361.05391.05781.1114
DEPI 1.07791.05451.01641.0260.93741.05920.92280.99930.98560.9203
SGAI 0.99421.06971.0850.99821.021.03780.99581.05561.12790.9563
LVGI 0.83830.75371.01971.15080.95040.90470.90421.00141.22470.8597
TATA -0.0793-0.0549-0.0636-0.0511-0.0557-0.0537-0.0254-0.0478-0.0511-0.0449
M-score -2.75-2.55-2.71-2.53-2.86-2.66-2.57-2.66-2.72-2.69

Equifax Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.99561.02121.01511.05380.97370.99140.93530.87910.99821.0187
GMI 0.960.95990.95980.96720.97060.96880.96920.96260.97640.9902
AQI 0.99190.97780.94881.03961.05531.06191.08280.971.00351.0042
SGI 1.05511.05421.06051.05781.07051.09311.10261.11141.08831.0642
DEPI 0.98530.9860.98630.98560.9530.94540.92590.92030.94660.9448
SGAI 1.05361.04841.06161.12791.1141.11061.08320.95630.94330.9213
LVGI 0.9550.97760.9481.22471.22761.16661.13220.85970.94550.9687
TATA -0.0512-0.0497-0.0566-0.0511-0.0497-0.045-0.047-0.0449-0.0458-0.0471
M-score -2.70-2.68-2.71-2.72-2.77-2.69-2.72-2.69-2.61-2.61
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