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Invesco Ltd (NYSE:IVZ)
Beneish M-Score
-2.32 (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 -2.32 suggests that the company is not a manipulator.

IVZ' s 10-Year Beneish M-Score Range
Min: -2.86   Max: -1.96
Current: -2.32

-2.86
-1.96

During the past 13 years, the highest Beneish M-Score of Invesco Ltd was -1.96. The lowest was -2.86. And the median was -2.51.


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 * 1.1414+0.528 * 1+0.404 * 0.9947+0.892 * 1.1082+0.115 * 1.1077
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9909+4.679 * -0.0155-0.327 * 1.027
=-2.32

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $707 Mil.
Revenue was 1276.7 + 1311 + 1289.9 + 1269.5 = $5,147 Mil.
Gross Profit was 1276.7 + 1311 + 1289.9 + 1269.5 = $5,147 Mil.
Total Current Assets was $6,471 Mil.
Total Assets was $20,463 Mil.
Property, Plant and Equipment(Net PPE) was $403 Mil.
Depreciation, Depletion and Amortization(DDA) was $89 Mil.
Selling, General & Admin. Expense(SGA) was $3,870 Mil.
Total Current Liabilities was $9,283 Mil.
Long-Term Debt was $1,589 Mil.
Net Income was 269.8 + 256 + 274.5 + 187.8 = $988 Mil.
Non Operating Income was -29 + 17.1 + 66.2 + 51.3 = $106 Mil.
Cash Flow from Operations was 183 + 467.1 + 769.5 + -219.2 = $1,200 Mil.
Accounts Receivable was $559 Mil.
Revenue was 1225.1 + 1171.8 + 1135.5 + 1112.2 = $4,645 Mil.
Gross Profit was 1225.1 + 1171.8 + 1135.5 + 1112.2 = $4,645 Mil.
Total Current Assets was $6,054 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 $3,524 Mil.
Total Current Liabilities was $8,381 Mil.
Long-Term Debt was $1,589 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)
=(707.2 / 5147.1) / (559.1 / 4644.6)
=0.13739776 / 0.12037635
=1.1414

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)
=(1311 / 4644.6) / (1276.7 / 5147.1)
=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 - (6471 + 402.6) / 20462.5) / (1 - (6054 + 350.8) / 19270.5)
=0.66408797 / 0.66763706
=0.9947

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
=5147.1 / 4644.6
=1.1082

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))
=(88.4 / (88.4 + 350.8)) / (89.4 / (89.4 + 402.6))
=0.20127505 / 0.18170732
=1.1077

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)
=(3870.2 / 5147.1) / (3524.4 / 4644.6)
=0.75191856 / 0.75881669
=0.9909

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)
=((1589.3 + 9283.1) / 20462.5) / ((1588.6 + 8381) / 19270.5)
=0.53133293 / 0.51735035
=1.027

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
=(988.1 - 105.6 - 1200.4) / 20462.5
=-0.0155

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 -2.32 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 2.79490.48120.86340.62111.5221.51940.76381.03080.91391.1414
GMI 1111111111
AQI 0.94561.10240.97221.1120.9431.12091.01041.03230.82320.9947
SGI 1.35221.13021.19470.85270.79431.32751.17330.98981.14671.1082
DEPI 1.01821.35770.96561.06010.95220.99290.961.27721.06161.1077
SGAI 0.76770.93880.98561.13621.05391.01860.93941.01470.95810.9909
LVGI 1.02050.71181.07090.79890.91811.83110.96680.9291.12731.027
TATA 0.0076-0.0056-0.02090.00070.0029-0.0041-0.0091-0.00470.003-0.0155
M-score -0.47-2.68-2.57-2.86-2.18-1.96-2.56-2.42-2.51-2.32

Invesco Ltd Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.91321.02431.02181.08491.0440.91971.06830.92961.06051.1414
GMI 1111111111
AQI 0.95451.03230.92410.89750.91050.82321.01941.06481.13120.9947
SGI 0.97650.99611.01371.07431.10921.13951.15581.15041.14091.1082
DEPI 1.41181.27721.2361.20971.06991.06161.04321.04631.06021.1077
SGAI 1.00391.01531.00970.9930.97520.95760.97970.980.98870.9909
LVGI 0.86970.9290.99091.01581.07921.12731.04261.05341.07881.027
TATA -0.0036-0.00470.0094-0.0023-0.0160.003-0.0142-0.0154-0.0188-0.0155
M-score -2.53-2.42-2.41-2.37-2.47-2.51-2.34-2.47-2.35-2.32
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