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Equifax Inc (NYSE:EFX)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

EFX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.9   Max: -2.15
Current: -2.5

-3.9
-2.15

During the past 13 years, the highest Beneish M-Score of Equifax Inc was -2.15. The lowest was -3.90. 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 * 1.0627+0.528 * 1.0231+0.404 * 1.0508+0.892 * 1.148+0.115 * 1.047
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9314+4.679 * -0.0379-0.327 * 1.2475
=-2.50

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $436 Mil.
Revenue was 804.1 + 811.3 + 728.3 + 666.3 = $3,010 Mil.
Gross Profit was 516.1 + 525.5 + 475 + 441.3 = $1,958 Mil.
Total Current Assets was $662 Mil.
Total Assets was $6,807 Mil.
Property, Plant and Equipment(Net PPE) was $443 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $924 Mil.
Total Current Liabilities was $1,298 Mil.
Long-Term Debt was $2,136 Mil.
Net Income was 132.8 + 130.9 + 102.1 + 111.9 = $478 Mil.
Non Operating Income was 2.4 + -0.8 + -2.1 + 6.5 = $6 Mil.
Cash Flow from Operations was 245 + 189.2 + 90.3 + 205.3 = $730 Mil.
Accounts Receivable was $358 Mil.
Revenue was 667.4 + 678.1 + 651.8 + 624.6 = $2,622 Mil.
Gross Profit was 440.9 + 457.3 + 436.7 + 410 = $1,745 Mil.
Total Current Assets was $582 Mil.
Total Assets was $4,541 Mil.
Property, Plant and Equipment(Net PPE) was $339 Mil.
Depreciation, Depletion and Amortization(DDA) was $201 Mil.
Selling, General & Admin. Expense(SGA) was $864 Mil.
Total Current Liabilities was $691 Mil.
Long-Term Debt was $1,146 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)
=(436.4 / 3010) / (357.7 / 2621.9)
=0.14498339 / 0.13642778
=1.0627

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)
=(1744.9 / 2621.9) / (1957.9 / 3010)
=0.66550974 / 0.65046512
=1.0231

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 - (661.8 + 443.3) / 6806.6) / (1 - (582.1 + 339) / 4541.4)
=0.83764288 / 0.79717708
=1.0508

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
=3010 / 2621.9
=1.148

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))
=(201.4 / (201.4 + 339)) / (245 / (245 + 443.3))
=0.3726869 / 0.35594944
=1.047

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)
=(923.6 / 3010) / (863.8 / 2621.9)
=0.30684385 / 0.32945574
=0.9314

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)
=((2136.3 + 1297.7) / 6806.6) / ((1145.9 + 690.7) / 4541.4)
=0.50451033 / 0.40441274
=1.2475

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
=(477.7 - 6 - 729.8) / 6806.6
=-0.0379

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 -2.50 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 local exchange's currency.

Equifax Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.05791.01380.81561.15160.93671.06371.0180.87911.02960.9489
GMI 0.9891.0051.00191.01670.98270.94130.99140.96261.00760.9797
AQI 0.94161.12410.99740.98630.99310.99961.03960.971.01930.9814
SGI 1.07131.19191.05030.88651.08361.01811.0951.11141.05751.0933
DEPI 1.01641.0260.93741.05920.92280.99930.98560.92030.98171.1464
SGAI 1.0850.99821.021.03780.99581.08421.09820.95630.9931.0761
LVGI 1.01971.15080.95040.90470.90421.00141.22470.85971.06060.9163
TATA -0.061-0.0494-0.0557-0.0537-0.0254-0.0478-0.0511-0.0455-0.0544-0.071
M-score -2.70-2.52-2.86-2.66-2.57-2.68-2.70-2.69-2.66-2.76

Equifax Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.01871.00011.02960.99750.97541.00650.94891.06991.01461.0627
GMI 0.99020.99681.00760.99480.98390.98250.97970.99561.01421.0231
AQI 1.00421.00591.01930.97370.97550.97240.98141.05071.05031.0508
SGI 1.06421.0581.05751.07831.09321.09691.09331.09441.11891.148
DEPI 0.94280.98230.98170.99451.03721.07431.14641.1731.12291.047
SGAI 0.92130.9430.9931.04711.08221.06691.07611.010.96040.9314
LVGI 0.96871.01311.06061.03181.0530.99570.91631.27331.23791.2475
TATA -0.05-0.0523-0.0544-0.0613-0.0617-0.0721-0.071-0.0433-0.0432-0.0379
M-score -2.63-2.67-2.66-2.73-2.75-2.75-2.76-2.59-2.59-2.50
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