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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.
MasTec, Inc. has a M-score of -2.48 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of MasTec, Inc. was -0.58. The lowest was -3.87. And the median was -2.53.
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 MasTec, 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 * 1.1143||+||0.528 * 0.8808||+||0.404 * 0.9152||+||0.892 * 1.1605||+||0.115 * 0.9363|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1783||+||4.679 * -0.0205||-||0.327 * 1.0446|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $1,134 Mil.|
Revenue was 1159.13 + 1269.385 + 977.624 + 918.648 = $4,325 Mil.
Gross Profit was 172.05 + 188.253 + 154.969 + 127.149 = $642 Mil.
Total Current Assets was $1,306 Mil.
Total Assets was $2,920 Mil.
Property, Plant and Equipment(Net PPE) was $488 Mil.
Depreciation, Depletion and Amortization(DDA) was $141 Mil.
Selling, General & Admin. Expense(SGA) was $215 Mil.
Total Current Liabilities was $826 Mil.
Long-Term Debt was $765 Mil.
Net Income was 41.501 + 46.138 + 34.941 + 18.37 = $141 Mil.
Non Operating Income was 2.863 + 2.778 + -0.322 + -4.798 = $1 Mil.
Cash Flow from Operations was 75.411 + 110.424 + -17.249 + 31.816 = $200 Mil.
|Accounts Receivable was $877 Mil.
Revenue was 932.358 + 1067.3 + 988.874 + 738.257 = $3,727 Mil.
Gross Profit was 138.219 + 142.996 + 120.37 + 86.01 = $488 Mil.
Total Current Assets was $1,050 Mil.
Total Assets was $2,416 Mil.
Property, Plant and Equipment(Net PPE) was $349 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $158 Mil.
Total Current Liabilities was $714 Mil.
Long-Term Debt was $546 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1134.3 / 4324.787)||/||(877.2 / 3726.789)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(188.253 / 3726.789)||/||(172.05 / 4324.787)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1305.983 + 488.132) / 2919.638)||/||(1 - (1049.641 + 348.858) / 2416.308)|
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.
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))|
|=||(92.601 / (92.601 + 348.858))||/||(140.928 / (140.928 + 488.132))|
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)|
|=||(215.402 / 4324.787)||/||(157.524 / 3726.789)|
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)|
|=||((765.425 + 825.546) / 2919.638)||/||((546.323 + 714.135) / 2416.308)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(140.95 - 0.521||-||200.402)||/||2919.638|
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.
MasTec, Inc. has a M-score of -2.48 suggests that the company will not be a manipulator.
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
MasTec, Inc. Annual Data
MasTec, Inc. Quarterly Data