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GuruFocus has detected 5 Warning Signs with MasTec Inc $MTZ.
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MasTec Inc (NYSE:MTZ)
Beneish M-Score
-2.44 (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.

MasTec Inc has a M-score of -2.44 suggests that the company is not a manipulator.

MTZ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.87   Max: -1.25
Current: -2.44

-3.87
-1.25

During the past 13 years, the highest Beneish M-Score of MasTec Inc was -1.25. The lowest was -3.87. And the median was -2.57.


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 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 * 1.0399+0.528 * 0.858+0.404 * 0.9142+0.892 * 1.2201+0.115 * 1.0085
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8058+4.679 * -0.0266-0.327 * 0.9829
=-2.44

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,156 Mil.
Revenue was 1341.892 + 1586.181 + 1232.404 + 974.225 = $5,135 Mil.
Gross Profit was 221.338 + 217.193 + 164.222 + 89.824 = $693 Mil.
Total Current Assets was $1,402 Mil.
Total Assets was $3,183 Mil.
Property, Plant and Equipment(Net PPE) was $549 Mil.
Depreciation, Depletion and Amortization(DDA) was $165 Mil.
Selling, General & Admin. Expense(SGA) was $261 Mil.
Total Current Liabilities was $840 Mil.
Long-Term Debt was $961 Mil.
Net Income was 53.591 + 56.277 + 24.088 + -2.692 = $131 Mil.
Non Operating Income was -6.029 + 0.965 + -1.035 + 16.422 = $10 Mil.
Cash Flow from Operations was 78.452 + 98.653 + 12.637 + 15.851 = $206 Mil.
Accounts Receivable was $911 Mil.
Revenue was 1027.424 + 1111.01 + 1066.629 + 1003.268 = $4,208 Mil.
Gross Profit was 111.193 + 138.299 + 120.682 + 116.854 = $487 Mil.
Total Current Assets was $1,130 Mil.
Total Assets was $2,927 Mil.
Property, Plant and Equipment(Net PPE) was $559 Mil.
Depreciation, Depletion and Amortization(DDA) was $170 Mil.
Selling, General & Admin. Expense(SGA) was $266 Mil.
Total Current Liabilities was $753 Mil.
Long-Term Debt was $933 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)
=(1156 / 5134.702) / (911.1 / 4208.331)
=0.22513478 / 0.21649913
=1.0399

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)
=(487.028 / 4208.331) / (692.577 / 5134.702)
=0.11572949 / 0.13488163
=0.858

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 - (1402.486 + 549.084) / 3183.132) / (1 - (1129.758 + 558.667) / 2927.347)
=0.38690259 / 0.42322349
=0.9142

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
=5134.702 / 4208.331
=1.2201

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))
=(169.662 / (169.662 + 558.667)) / (164.915 / (164.915 + 549.084))
=0.23294692 / 0.23097371
=1.0085

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)
=(261.433 / 5134.702) / (265.911 / 4208.331)
=0.05091493 / 0.06318681
=0.8058

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)
=((961.379 + 839.99) / 3183.132) / ((932.868 + 752.535) / 2927.347)
=0.56591087 / 0.57574418
=0.9829

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
=(131.264 - 10.323 - 205.593) / 3183.132
=-0.0266

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 -2.44 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 local exchange's currency.

MasTec Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.88671.53940.83781.04221.12171.0121.11471.07730.76591.0399
GMI 0.99860.97350.94961.04151.11491.0030.88081.08081.18760.858
AQI 0.971.23011.04450.96291.05230.87980.91611.02461.07040.9142
SGI 1.10351.32851.17761.321.32121.31631.16051.06640.91251.2201
DEPI 1.11371.18460.76560.82131.09161.06620.93111.12790.85271.0085
SGAI 1.41730.58860.91760.87670.89460.90261.17831.03751.22280.8058
LVGI 1.10011.09970.93660.99670.94531.03761.04581.05031.00490.9829
TATA -0.11190.0061-0.0586-0.07630.0269-0.0236-0.0205-0.0604-0.1282-0.0266
M-score -3.12-1.52-2.75-2.50-1.83-2.33-2.48-2.59-3.30-2.44

MasTec Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.02411.07730.88780.85120.75780.76590.95511.02871.08731.0399
GMI 1.05721.08081.06311.08741.13921.18761.23721.11841.02050.858
AQI 0.97641.02461.08681.09041.18481.07041.00470.96250.87950.9142
SGI 1.10781.06641.06721.02740.97190.91250.89740.94121.09251.2201
DEPI 1.04091.12791.03190.88040.8710.85270.91150.95760.98681.0085
SGAI 1.01151.03751.10391.20041.28181.22281.08390.97140.83610.8058
LVGI 1.0241.05031.06041.02851.00861.00491.00231.00711.01360.9829
TATA -0.007-0.0604-0.1106-0.1118-0.1486-0.1282-0.0955-0.0718-0.0568-0.0266
M-score -2.38-2.59-3.01-3.09-3.34-3.30-2.96-2.80-2.60-2.44
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