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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 * 1.0699+0.528 * 0.9956+0.404 * 1.0507+0.892 * 1.0944+0.115 * 1.173
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.01+4.679 * -0.0433-0.327 * 1.2733
=-2.59

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $425 Mil.
Revenue was 728.3 + 666.3 + 667.4 + 678.1 = $2,740 Mil.
Gross Profit was 475 + 441.3 + 440.9 + 457.3 = $1,815 Mil.
Total Current Assets was $630 Mil.
Total Assets was $6,733 Mil.
Property, Plant and Equipment(Net PPE) was $397 Mil.
Depreciation, Depletion and Amortization(DDA) was $207 Mil.
Selling, General & Admin. Expense(SGA) was $895 Mil.
Total Current Liabilities was $1,729 Mil.
Long-Term Debt was $1,884 Mil.
Net Income was 102.1 + 111.9 + 117.9 + 111 = $443 Mil.
Non Operating Income was -2.1 + 6.5 + 14.4 + -13.9 = $5 Mil.
Cash Flow from Operations was 90.3 + 205.3 + 247.2 + 186.7 = $730 Mil.
Accounts Receivable was $363 Mil.
Revenue was 651.8 + 624.6 + 613.4 + 613.9 = $2,504 Mil.
Gross Profit was 436.7 + 410 + 402.4 + 401.6 = $1,651 Mil.
Total Current Assets was $585 Mil.
Total Assets was $4,595 Mil.
Property, Plant and Equipment(Net PPE) was $304 Mil.
Depreciation, Depletion and Amortization(DDA) was $204 Mil.
Selling, General & Admin. Expense(SGA) was $809 Mil.
Total Current Liabilities was $791 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)
=(424.7 / 2740.1) / (362.7 / 2503.7)
=0.15499434 / 0.1448656
=1.0699

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)
=(1650.7 / 2503.7) / (1814.5 / 2740.1)
=0.65930423 / 0.66220211
=0.9956

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 - (630.1 + 397.4) / 6732.9) / (1 - (585 + 304) / 4595)
=0.84739117 / 0.80652884
=1.0507

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
=2740.1 / 2503.7
=1.0944

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))
=(203.6 / (203.6 + 304)) / (206.5 / (206.5 + 397.4))
=0.40110323 / 0.34194403
=1.173

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)
=(894.5 / 2740.1) / (809.2 / 2503.7)
=0.32644794 / 0.32320166
=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)
=((1883.8 + 1729.4) / 6732.9) / ((1145.8 + 790.8) / 4595)
=0.5366484 / 0.42145811
=1.2733

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
=(442.9 - 4.9 - 729.5) / 6732.9
=-0.0433

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 0.9891.0050.99051.03190.97940.97280.98640.93621.00760.9797
AQI 0.94161.12410.99740.98630.99310.99961.03960.971.01930.9818
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 1.0850.99821.04630.99211.01541.03751.10970.9890.9931.0761
LVGI 1.01971.15080.95040.90470.90421.00141.22470.85971.06060.9187
TATA -0.0623-0.0494-0.0527-0.0537-0.0254-0.0478-0.0511-0.0449-0.0544-0.0709
M-score -2.70-2.52-2.86-2.66-2.58-2.65-2.70-2.72-2.66-2.76

Equifax Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.87910.99821.01871.00011.02960.99750.97541.00650.94891.0699
GMI 0.96260.97640.99020.99681.00760.99480.98390.98250.97970.9956
AQI 0.971.00351.00421.00591.01930.97370.97550.97240.98181.0507
SGI 1.11141.08831.06421.0581.05751.07831.09321.09691.09331.0944
DEPI 0.92030.94550.94280.98230.98170.99451.03721.07431.14641.173
SGAI 0.95630.94330.92130.9430.9931.04711.08221.06691.07611.01
LVGI 0.85970.94550.96871.01311.06061.03181.0530.99570.91871.2733
TATA -0.0455-0.0478-0.05-0.0523-0.0544-0.0613-0.0617-0.0721-0.0709-0.0433
M-score -2.69-2.62-2.63-2.67-2.66-2.73-2.75-2.75-2.76-2.59
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