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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 -2.48.
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 * 1.0247||+||0.528 * 1.0606||+||0.404 * 0.9764||+||0.892 * 1.1072||+||0.115 * 1.045|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0121||+||4.679 * -0.006||-||0.327 * 1.024|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,390 Mil.|
Revenue was 1309.596 + 1104.556 + 964.029 + 1159.13 = $4,537 Mil.
Gross Profit was 186.635 + 153.667 + 122.975 + 172.05 = $635 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.
Net Income was 45.271 + 32.05 + 16.023 + 41.501 = $135 Mil.
Non Operating Income was 1.416 + -0.298 + -0.345 + 2.863 = $4 Mil.
Cash Flow from Operations was 25.7 + 75.713 + -20.394 + 71.146 = $152 Mil.
|Accounts Receivable was $1,225 Mil.
Revenue was 1269.385 + 977.624 + 918.648 + 932.358 = $4,098 Mil.
Gross Profit was 188.253 + 154.969 + 127.149 + 138.219 = $609 Mil.
Total Current Assets was $1,332 Mil.
Total Assets was $2,954 Mil.
Property, Plant and Equipment(Net PPE) was $504 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $199 Mil.
Total Current Liabilities was $882 Mil.
Long-Term Debt was $780 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)|
|=||(1389.903 / 4537.311)||/||(1225.122 / 4098.015)|
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)|
|=||(153.667 / 4098.015)||/||(186.635 / 4537.311)|
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 - (1573.952 + 614.359) / 3470.126)||/||(1 - (1332.316 + 504.313) / 2954.338)|
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))|
|=||(129.945 / (129.945 + 504.313))||/||(149.813 / (149.813 + 614.359))|
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)|
|=||(223.094 / 4537.311)||/||(199.093 / 4098.015)|
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)|
|=||((1088.289 + 910.874) / 3470.126)||/||((779.92 + 882.229) / 2954.338)|
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|
|=||(134.845 - 3.636||-||152.165)||/||3470.126|
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 -2.37 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