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Invesco Ltd (NYSE:IVZ)
Beneish M-Score
-2.35 (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.

Invesco Ltd has a M-score of -2.35 suggests that the company is not a manipulator.

IVZ' s 10-Year Beneish M-Score Range
Min: -3.38   Max: -1.76
Current: -2.35

-3.38
-1.76

During the past 13 years, the highest Beneish M-Score of Invesco Ltd was -1.76. The lowest was -3.38. And the median was -2.42.


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 Invesco Ltd 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 * 1.0605+0.528 * 1+0.404 * 1.1312+0.892 * 1.1409+0.115 * 1.0602
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9887+4.679 * -0.0188-0.327 * 1.0788
=-2.35

* 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 $651 Mil.
Revenue was 1311 + 1289.9 + 1269.5 + 1225.1 = $5,096 Mil.
Gross Profit was 1311 + 1289.9 + 1269.5 + 1225.1 = $5,096 Mil.
Total Current Assets was $4,231 Mil.
Total Assets was $20,081 Mil.
Property, Plant and Equipment(Net PPE) was $367 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $3,874 Mil.
Total Current Liabilities was $8,870 Mil.
Long-Term Debt was $1,589 Mil.
Net Income was 256 + 274.5 + 187.8 + 287.4 = $1,006 Mil.
Non Operating Income was 17.1 + 66.2 + 51.3 + 41.3 = $176 Mil.
Cash Flow from Operations was 467.1 + 769.5 + -219.2 + 190.3 = $1,208 Mil.
Accounts Receivable was $538 Mil.
Revenue was 1171.8 + 1135.5 + 1112.2 + 1046.7 = $4,466 Mil.
Gross Profit was 1171.8 + 1135.5 + 1112.2 + 1046.7 = $4,466 Mil.
Total Current Assets was $5,638 Mil.
Total Assets was $18,764 Mil.
Property, Plant and Equipment(Net PPE) was $336 Mil.
Depreciation, Depletion and Amortization(DDA) was $89 Mil.
Selling, General & Admin. Expense(SGA) was $3,434 Mil.
Total Current Liabilities was $3,669 Mil.
Long-Term Debt was $5,391 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)
=(650.7 / 5095.5) / (537.8 / 4466.2)
=0.12770091 / 0.12041557
=1.0605

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)
=(1289.9 / 4466.2) / (1311 / 5095.5)
=1 / 1
=1

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 - (4231.1 + 367.3) / 20081) / (1 - (5637.7 + 336.4) / 18763.5)
=0.77100742 / 0.68161057
=1.1312

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
=5095.5 / 4466.2
=1.1409

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))
=(88.5 / (88.5 + 336.4)) / (89.8 / (89.8 + 367.3))
=0.2082843 / 0.19645592
=1.0602

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)
=(3873.5 / 5095.5) / (3433.8 / 4466.2)
=0.76018055 / 0.76884152
=0.9887

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)
=((1589.1 + 8870) / 20081) / ((5390.7 + 3668.6) / 18763.5)
=0.52084558 / 0.48281504
=1.0788

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
=(1005.7 - 175.9 - 1207.7) / 20081
=-0.0188

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.

Invesco Ltd has a M-score of -2.35 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.

Invesco Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 2.79490.48120.86340.62111.5221.51940.76381.03080.9139
GMI 111111111
AQI 0.94561.10240.97221.1120.9431.12091.01041.03230.925
SGI 1.35221.13021.19470.85270.79431.32751.17330.98981.1467
DEPI 1.01821.35770.96561.06010.95220.99290.961.27721.0616
SGAI 0.76770.93880.98561.13621.05391.01860.93941.01470.9581
LVGI 1.02050.71181.07090.79890.91811.83110.96680.9291.0751
TATA 0.0076-0.0056-0.02090.00070.0029-0.0041-0.0091-0.00470.003
M-score -0.47-2.68-2.57-2.86-2.18-1.96-2.56-2.42-2.45

Invesco Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87680.91321.02431.02181.08491.0440.91971.06830.92961.0605
GMI 1111111111
AQI 1.0160.95451.03230.92410.89750.91050.9251.01941.06481.1312
SGI 0.98320.97650.99611.01371.07431.10921.13951.15581.15041.1409
DEPI 1.14981.41181.27721.2361.20971.06991.06161.04321.04631.0602
SGAI 0.98661.00391.01531.00970.9930.97520.95760.97970.980.9887
LVGI 0.89710.86970.9290.99091.01581.07921.07511.04261.05341.0788
TATA -0.021-0.0036-0.00470.0094-0.0023-0.0160.003-0.0142-0.0154-0.0188
M-score -2.65-2.53-2.42-2.41-2.37-2.47-2.46-2.34-2.47-2.35
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