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Invesco Ltd. (NYSE:IVZ)
Beneish M-Score
-2.19 (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 -2.19 signals that the company is a manipulator.

IVZ' s 10-Year Beneish M-Score Range
Min: -2.88   Max: -2.1
Current: -2.19

-2.88
-2.1

During the past 13 years, the highest Beneish M-Score of Invesco Ltd. was -2.10. The lowest was -2.88. And the median was -2.28.


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 * 1.2003+0.528 * 1+0.404 * 0.925+0.892 * 1.1467+0.115 * 1.0616
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9578+4.679 * 0.003-0.327 * 1.0751
=-2.19

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,492 Mil.
Revenue was 1225.1 + 1171.8 + 1135.5 + 1141.8 = $4,674 Mil.
Gross Profit was 1225.1 + 1171.8 + 1135.5 + 1141.8 = $4,674 Mil.
Total Current Assets was $4,463 Mil.
Total Assets was $19,271 Mil.
Property, Plant and Equipment(Net PPE) was $351 Mil.
Depreciation, Depletion and Amortization(DDA) was $88 Mil.
Selling, General & Admin. Expense(SGA) was $3,548 Mil.
Total Current Liabilities was $3,738 Mil.
Long-Term Debt was $5,770 Mil.
Net Income was 287.4 + 228.1 + 202.6 + 222.2 = $940 Mil.
Non Operating Income was 41.3 + 51.2 + 5.7 + 4.7 = $103 Mil.
Cash Flow from Operations was 190.3 + 334.3 + 740.2 + -484.6 = $780 Mil.
Accounts Receivable was $1,084 Mil.
Revenue was 1046.7 + 1013.9 + 981.8 + 1033.7 = $4,076 Mil.
Gross Profit was 1046.7 + 1013.9 + 981.8 + 1033.7 = $4,076 Mil.
Total Current Assets was $2,956 Mil.
Total Assets was $17,492 Mil.
Property, Plant and Equipment(Net PPE) was $350 Mil.
Depreciation, Depletion and Amortization(DDA) was $95 Mil.
Selling, General & Admin. Expense(SGA) was $3,230 Mil.
Total Current Liabilities was $2,942 Mil.
Long-Term Debt was $5,085 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)
=(1491.5 / 4674.2) / (1083.6 / 4076.1)
=0.31909204 / 0.26584235
=1.2003

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)
=(1171.8 / 4076.1) / (1225.1 / 4674.2)
=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 - (4463.3 + 350.8) / 19270.5) / (1 - (2955.9 + 349.6) / 17492.4)
=0.75018292 / 0.81103222
=0.925

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
=4674.2 / 4076.1
=1.1467

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))
=(95 / (95 + 349.6)) / (88.4 / (88.4 + 350.8))
=0.21367521 / 0.20127505
=1.0616

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)
=(3547.6 / 4674.2) / (3230.1 / 4076.1)
=0.7589748 / 0.79244866
=0.9578

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)
=((5770.3 + 3737.5) / 19270.5) / ((5085.4 + 2942.3) / 17492.4)
=0.49338626 / 0.45892502
=1.0751

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
=(940.3 - 102.9 - 780.2) / 19270.5
=0.003

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 -2.19 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.54710.75160.78240.80140.96421.12471.16541.53131.30141.2003
GMI 1111111111
AQI 1.02651.01041.00451.0160.95451.03230.92410.89750.91050.925
SGI 1.28581.17331.07970.98320.97650.99611.02091.08171.11661.1467
DEPI 0.85630.961.04041.14981.41181.27721.2361.20971.06991.0616
SGAI 0.94850.93940.94970.98661.00391.01531.00960.9930.97530.9578
LVGI 0.96880.96680.94010.89710.86970.9290.99091.01581.07921.0751
TATA 0.0143-0.0091-0.0043-0.021-0.0036-0.00470.0094-0.0023-0.0160.003
M-score -2.56-2.58-2.59-2.72-2.48-2.33-2.27-1.95-2.22-2.19
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