Switch to:
Equifax Inc (NYSE:EFX)
Beneish M-Score
-2.59 (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 -2.59 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: -2.59

-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 * 1.0146+0.528 * 1.0142+0.404 * 1.0503+0.892 * 1.1189+0.115 * 1.1253
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9604+4.679 * -0.0432-0.327 * 1.2379
=-2.59

* 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 $418 Mil.
Revenue was 811.3 + 728.3 + 666.3 + 667.4 = $2,873 Mil.
Gross Profit was 525.5 + 475 + 441.3 + 440.9 = $1,883 Mil.
Total Current Assets was $627 Mil.
Total Assets was $6,641 Mil.
Property, Plant and Equipment(Net PPE) was $418 Mil.
Depreciation, Depletion and Amortization(DDA) was $224 Mil.
Selling, General & Admin. Expense(SGA) was $907 Mil.
Total Current Liabilities was $962 Mil.
Long-Term Debt was $2,499 Mil.
Net Income was 130.9 + 102.1 + 111.9 + 117.9 = $463 Mil.
Non Operating Income was -0.8 + -2.1 + 6.5 + 14.4 = $18 Mil.
Cash Flow from Operations was 189.2 + 90.3 + 205.3 + 247.2 = $732 Mil.
Accounts Receivable was $368 Mil.
Revenue was 678.1 + 651.8 + 624.6 + 613.4 = $2,568 Mil.
Gross Profit was 457.3 + 436.7 + 410 + 402.4 = $1,706 Mil.
Total Current Assets was $591 Mil.
Total Assets was $4,586 Mil.
Property, Plant and Equipment(Net PPE) was $316 Mil.
Depreciation, Depletion and Amortization(DDA) was $204 Mil.
Selling, General & Admin. Expense(SGA) was $844 Mil.
Total Current Liabilities was $785 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)
=(418 / 2873.3) / (368.2 / 2567.9)
=0.14547733 / 0.14338565
=1.0146

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)
=(1706.4 / 2567.9) / (1882.7 / 2873.3)
=0.66451186 / 0.65523962
=1.0142

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 - (627.2 + 418.2) / 6640.8) / (1 - (591.2 + 315.6) / 4585.5)
=0.84257921 / 0.80224621
=1.0503

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
=2873.3 / 2567.9
=1.1189

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))
=(203.8 / (203.8 + 315.6)) / (223.9 / (223.9 + 418.2))
=0.39237582 / 0.34869958
=1.1253

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)
=(907.4 / 2873.3) / (844.4 / 2567.9)
=0.31580413 / 0.328829
=0.9604

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)
=((2498.7 + 961.9) / 6640.8) / ((1145.8 + 784.5) / 4585.5)
=0.52111191 / 0.42095737
=1.2379

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
=(462.8 - 18 - 732) / 6640.8
=-0.0432

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 -2.59 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.05791.01380.81561.08310.9961.02761.01110.91621.02960.9489
GMI 0.9891.0051.00191.02020.97940.97280.98640.93621.00760.9797
AQI 0.94161.12410.99740.98630.99420.99941.04070.96811.0160.985
SGI 1.07131.19191.05030.94261.01921.05391.10241.06641.05751.0933
DEPI 1.01641.0260.93741.05920.92280.99930.98560.92030.98171.1464
SGAI 1.0850.99821.021.01781.01541.03751.10970.9890.9931.0761
LVGI 1.01971.15080.95040.90470.90531.00151.22560.8581.05770.9213
TATA -0.061-0.0494-0.0557-0.0537-0.0254-0.0479-0.0512-0.0455-0.0542-0.0709
M-score -2.70-2.52-2.86-2.67-2.58-2.65-2.70-2.72-2.66-2.76

Equifax Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.03131.0411.01091.02960.99750.97541.00650.94891.06991.0146
GMI 0.95540.9750.98961.00760.99480.98390.98250.97970.99561.0142
AQI 1.00351.00421.00591.0160.97370.97550.97240.9851.05071.0503
SGI 1.05341.04151.04681.05751.07831.09321.09691.09331.09441.1189
DEPI 0.94660.94480.98560.98170.99211.03291.0671.14641.17441.1253
SGAI 0.96910.93840.95170.9931.04711.08221.06691.07611.010.9604
LVGI 0.94550.96871.01311.05771.03181.0530.99570.92131.27331.2379
TATA -0.0464-0.0485-0.0523-0.0542-0.0628-0.0632-0.0721-0.0709-0.0433-0.0432
M-score -2.63-2.63-2.67-2.66-2.74-2.76-2.75-2.76-2.59-2.59
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK