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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 -4.56. And the median was -2.50.
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 * 0.7578||+||0.528 * 1.1392||+||0.404 * 1.1848||+||0.892 * 0.9719||+||0.115 * 0.871|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2818||+||4.679 * -0.1486||-||0.327 * 1.0086|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $1,024 Mil.|
Revenue was 1111.01 + 1066.629 + 1003.268 + 1231.265 = $4,412 Mil.
Gross Profit was 138.299 + 120.682 + 116.854 + 168.203 = $544 Mil.
Total Current Assets was $1,238 Mil.
Total Assets was $3,246 Mil.
Property, Plant and Equipment(Net PPE) was $587 Mil.
Depreciation, Depletion and Amortization(DDA) was $171 Mil.
Selling, General & Admin. Expense(SGA) was $278 Mil.
Total Current Liabilities was $787 Mil.
Long-Term Debt was $1,099 Mil.
Net Income was 7.618 + -3.7 + -6.263 + 21.116 = $19 Mil.
Non Operating Income was -6.702 + 2.353 + 0.007 + 2.692 = $-2 Mil.
Cash Flow from Operations was 94.749 + 47.027 + 118.826 + 241.992 = $503 Mil.
|Accounts Receivable was $1,390 Mil.
Revenue was 1315.488 + 1107.232 + 957.818 + 1159.13 = $4,540 Mil.
Gross Profit was 192.627 + 156.517 + 116.494 + 172.05 = $638 Mil.
Total Current Assets was $1,574 Mil.
Total Assets was $3,470 Mil.
Property, Plant and Equipment(Net PPE) was $614 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General & Admin. Expense(SGA) was $223 Mil.
Total Current Liabilities was $911 Mil.
Long-Term Debt was $1,088 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)|
|=||(1023.663 / 4412.172)||/||(1389.903 / 4539.668)|
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)|
|=||(120.682 / 4539.668)||/||(138.299 / 4412.172)|
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 - (1238.314 + 586.993) / 3245.786)||/||(1 - (1573.952 + 614.359) / 3470.126)|
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))|
|=||(149.811 / (149.811 + 614.359))||/||(170.504 / (170.504 + 586.993))|
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)|
|=||(277.929 / 4412.172)||/||(223.094 / 4539.668)|
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)|
|=||((1098.585 + 787.41) / 3245.786)||/||((1088.289 + 910.874) / 3470.126)|
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|
|=||(18.771 - -1.65||-||502.594)||/||3245.786|
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 -3.34 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