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Invesco Ltd (NYSE:IVZ)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

IVZ' s 10-Year Beneish M-Score Range
Min: -3   Max: -1.73
Current: -2.16

-3
-1.73

During the past 13 years, the highest Beneish M-Score of Invesco Ltd was -1.73. The lowest was -3.00. And the median was -2.41.


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 * 1.2662+0.528 * 1+0.404 * 1.0194+0.892 * 1.1558+0.115 * 1.0432
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9797+4.679 * -0.0142-0.327 * 1.0426
=-2.16

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $2,225 Mil.
Revenue was 1269.5 + 1225.1 + 1171.8 + 1135.5 = $4,802 Mil.
Gross Profit was 1269.5 + 1225.1 + 1171.8 + 1135.5 = $4,802 Mil.
Total Current Assets was $5,128 Mil.
Total Assets was $20,346 Mil.
Property, Plant and Equipment(Net PPE) was $342 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $3,704 Mil.
Total Current Liabilities was $3,976 Mil.
Long-Term Debt was $6,351 Mil.
Net Income was 187.8 + 287.4 + 228.1 + 202.6 = $906 Mil.
Non Operating Income was 51.3 + 41.3 + 51.2 + 5.7 = $150 Mil.
Cash Flow from Operations was -219.2 + 190.3 + 334.3 + 740.2 = $1,046 Mil.
Accounts Receivable was $1,520 Mil.
Revenue was 1112.2 + 1046.7 + 1013.9 + 981.8 = $4,155 Mil.
Gross Profit was 1112.2 + 1046.7 + 1013.9 + 981.8 = $4,155 Mil.
Total Current Assets was $4,904 Mil.
Total Assets was $18,535 Mil.
Property, Plant and Equipment(Net PPE) was $337 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $3,271 Mil.
Total Current Liabilities was $3,288 Mil.
Long-Term Debt was $5,736 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)
=(2225 / 4801.9) / (1520.4 / 4154.6)
=0.46335825 / 0.36595581
=1.2662

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)
=(1225.1 / 4154.6) / (1269.5 / 4801.9)
=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 - (5128.2 + 342.4) / 20346.3) / (1 - (4903.5 + 337.2) / 18534.5)
=0.73112556 / 0.71724622
=1.0194

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
=4801.9 / 4154.6
=1.1558

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))
=(93 / (93 + 337.2)) / (89.5 / (89.5 + 342.4))
=0.21617852 / 0.20722389
=1.0432

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)
=(3704.4 / 4801.9) / (3271.4 / 4154.6)
=0.77144464 / 0.78741636
=0.9797

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)
=((6351.4 + 3975.7) / 20346.3) / ((5735.9 + 3287.6) / 18534.5)
=0.50756649 / 0.48684885
=1.0426

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
=(905.9 - 149.5 - 1045.6) / 20346.3
=-0.0142

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 -2.16 signals that the company is likely to 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 0.82261.09830.88530.60231.55891.22890.75161.13181.2003
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 -2.28-2.11-2.55-2.88-2.15-2.22-2.58-2.32-2.19

Invesco Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.75160.78240.80140.96421.12471.17371.54181.31011.2081.2662
GMI 1111111111
AQI 1.01041.00451.0160.95451.03230.92410.89750.91050.9251.0194
SGI 1.17331.07970.98320.97650.99611.01371.07431.10921.13951.1558
DEPI 0.961.04041.14981.41181.27721.2361.20971.06991.06161.0432
SGAI 0.93940.94970.98661.00391.01531.00970.9930.97520.95760.9797
LVGI 0.96680.94010.89710.86970.9290.99091.01581.07921.07511.0426
TATA -0.0091-0.0043-0.021-0.0036-0.00470.0094-0.0023-0.0160.003-0.0142
M-score -2.58-2.59-2.72-2.48-2.33-2.27-1.95-2.22-2.19-2.16
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