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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.
During the past 13 years, the highest Beneish M-Score of MasTec Inc was -0.58. The lowest was -4.76. And the median was -2.54.
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 * 0.9551||+||0.528 * 1.2372||+||0.404 * 1.0047||+||0.892 * 0.8974||+||0.115 * 0.9115|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0839||+||4.679 * -0.0955||-||0.327 * 1.0023|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $971 Mil.|
Revenue was 974.225 + 1027.424 + 1111.01 + 1066.629 = $4,179 Mil.
Gross Profit was 89.824 + 111.193 + 138.299 + 120.682 = $460 Mil.
Total Current Assets was $1,199 Mil.
Total Assets was $2,987 Mil.
Property, Plant and Equipment(Net PPE) was $548 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $252 Mil.
Total Current Liabilities was $812 Mil.
Long-Term Debt was $939 Mil.
Net Income was -2.692 + -76.764 + 7.618 + -3.7 = $-76 Mil.
Non Operating Income was 16.422 + -66.759 + -6.702 + 2.353 = $-55 Mil.
Cash Flow from Operations was 15.851 + 106.811 + 94.749 + 47.027 = $264 Mil.
|Accounts Receivable was $1,133 Mil.
Revenue was 1003.268 + 1231.265 + 1315.488 + 1107.232 = $4,657 Mil.
Gross Profit was 116.854 + 168.203 + 192.627 + 156.517 = $634 Mil.
Total Current Assets was $1,358 Mil.
Total Assets was $3,351 Mil.
Property, Plant and Equipment(Net PPE) was $608 Mil.
Depreciation, Depletion and Amortization(DDA) was $164 Mil.
Selling, General & Admin. Expense(SGA) was $259 Mil.
Total Current Liabilities was $881 Mil.
Long-Term Debt was $1,078 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)|
|=||(970.9 / 4179.288)||/||(1132.832 / 4657.253)|
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)|
|=||(634.201 / 4657.253)||/||(459.998 / 4179.288)|
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 - (1198.536 + 548) / 2986.628)||/||(1 - (1358.173 + 608.019) / 3351.016)|
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))|
|=||(163.556 / (163.556 + 608.019))||/||(166.072 / (166.072 + 548))|
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)|
|=||(251.929 / 4179.288)||/||(259.007 / 4657.253)|
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)|
|=||((938.722 + 811.662) / 2986.628)||/||((1078.019 + 881.485) / 3351.016)|
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|
|=||(-75.538 - -54.686||-||264.438)||/||2986.628|
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 -2.96 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