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Equifax Inc (NYSE:EFX)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

EFX' s 10-Year Beneish M-Score Range
Min: -3.91   Max: -2.17
Current: -2.67

-3.91
-2.17

During the past 13 years, the highest Beneish M-Score of Equifax Inc was -2.17. The lowest was -3.91. 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 * 1.0001+0.528 * 0.9968+0.404 * 1.0059+0.892 * 1.058+0.115 * 0.9856
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.943+4.679 * -0.0517-0.327 * 1.0131
=-2.67

* 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 $324 Mil.
Revenue was 613.4 + 613.9 + 584.5 + 578.5 = $2,390 Mil.
Gross Profit was 402.4 + 401.6 + 377.7 + 381.3 = $1,563 Mil.
Total Current Assets was $550 Mil.
Total Assets was $4,707 Mil.
Property, Plant and Equipment(Net PPE) was $298 Mil.
Depreciation, Depletion and Amortization(DDA) was $198 Mil.
Selling, General & Admin. Expense(SGA) was $738 Mil.
Total Current Liabilities was $766 Mil.
Long-Term Debt was $1,146 Mil.
Net Income was 92.7 + 92.8 + 83.9 + 76.7 = $346 Mil.
Non Operating Income was 3.2 + 0.5 + -2.1 + -14.8 = $-13 Mil.
Cash Flow from Operations was 195.6 + 152.8 + 65 + 189.2 = $603 Mil.
Accounts Receivable was $306 Mil.
Revenue was 572 + 586.9 + 566.5 + 533.8 = $2,259 Mil.
Gross Profit was 375.2 + 388.7 + 371.4 + 337.3 = $1,473 Mil.
Total Current Assets was $527 Mil.
Total Assets was $4,390 Mil.
Property, Plant and Equipment(Net PPE) was $286 Mil.
Depreciation, Depletion and Amortization(DDA) was $185 Mil.
Selling, General & Admin. Expense(SGA) was $740 Mil.
Total Current Liabilities was $332 Mil.
Long-Term Debt was $1,428 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)
=(324 / 2390.3) / (306.2 / 2259.2)
=0.13554784 / 0.1355347
=1.0001

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)
=(401.6 / 2259.2) / (402.4 / 2390.3)
=0.65182365 / 0.65389282
=0.9968

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 - (550.4 + 297.9) / 4707.1) / (1 - (526.5 + 285.7) / 4390.4)
=0.81978288 / 0.81500547
=1.0059

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
=2390.3 / 2259.2
=1.058

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))
=(185.2 / (185.2 + 285.7)) / (197.8 / (197.8 + 297.9))
=0.39328945 / 0.39903167
=0.9856

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)
=(738.1 / 2390.3) / (739.8 / 2259.2)
=0.30878969 / 0.32746105
=0.943

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)
=((1145.7 + 766.1) / 4707.1) / ((1427.8 + 332.4) / 4390.4)
=0.40615241 / 0.40092019
=1.0131

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
=(346.1 - -13.2 - 602.6) / 4707.1
=-0.0517

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 -2.67 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 1.0580.97631.05791.01380.81561.15160.93671.02761.05380.8791
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 -2.68-2.55-2.71-2.53-2.86-2.66-2.57-2.66-2.72-2.69

Equifax Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02121.01511.05380.97370.99140.93530.87910.99821.01871.0001
GMI 0.95990.95980.96720.97060.96880.96920.96260.97640.99020.9968
AQI 0.97780.94881.03961.05531.06191.08280.971.00351.00421.0059
SGI 1.05421.06051.05781.07051.09311.10261.11141.08831.06421.058
DEPI 0.9860.98630.98560.9530.94540.92590.92030.94660.94480.9856
SGAI 1.04841.06161.12791.1141.11061.08320.95630.94330.92130.943
LVGI 0.97760.9481.22471.22761.16661.13220.85970.94550.96871.0131
TATA -0.0497-0.0566-0.0511-0.0497-0.0441-0.0476-0.0449-0.0458-0.048-0.0517
M-score -2.68-2.71-2.72-2.77-2.68-2.72-2.69-2.61-2.62-2.67
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