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Stantec, Inc. (NYSE:STN)
Beneish M-Score
-2.75 (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.

Stantec, Inc. has a M-score of -2.85 suggests that the company is not a manipulator.

STN' s 10-Year Beneish M-Score Range
Min: -2.92   Max: -0.17
Current: -2.75

-2.92
-0.17

During the past 13 years, the highest Beneish M-Score of Stantec, Inc. was -0.17. The lowest was -2.92. And the median was -2.40.


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 Stantec, 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 * 0.8468+0.528 * 1.0183+0.404 * 0.926+0.892 * 1.1372+0.115 * 0.991
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9873+4.679 * -0.0791-0.327 * 0.8935
=-2.85

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $491 Mil.
Revenue was 781.857404022 + 467.912162162 + 544.926923077 + 503.637880275 = $2,298 Mil.
Gross Profit was 232.753199269 + 253.852316602 + 244.714423077 + 226.032384691 = $957 Mil.
Total Current Assets was $664 Mil.
Total Assets was $1,525 Mil.
Property, Plant and Equipment(Net PPE) was $122 Mil.
Depreciation, Depletion and Amortization(DDA) was $51 Mil.
Selling, General & Admin. Expense(SGA) was $712 Mil.
Total Current Liabilities was $372 Mil.
Long-Term Debt was $184 Mil.
Net Income was 32.5968921389 + 44.3648648649 + 34.7413461538 + 27.9165848871 = $140 Mil.
Non Operating Income was 2.7084095064 + 1.22104247104 + 0.195192307692 + -0.184494602552 = $4 Mil.
Cash Flow from Operations was 110.3976234 + 107.673745174 + 37.7182692308 + 0.56624141315 = $256 Mil.
Accounts Receivable was $510 Mil.
Revenue was 712.260080645 + 402.600810537 + 466.873767258 + 439.270896274 = $2,021 Mil.
Gross Profit was 220.768145161 + 221.597771023 + 211.931952663 + 202.959718026 = $857 Mil.
Total Current Assets was $588 Mil.
Total Assets was $1,476 Mil.
Property, Plant and Equipment(Net PPE) was $116 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $634 Mil.
Total Current Liabilities was $344 Mil.
Long-Term Debt was $258 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)
=(491.401279707 / 2298.33436954) / (510.28125 / 2021.00555471)
=0.21380757 / 0.25248879
=0.8468

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)
=(253.852316602 / 2021.00555471) / (232.753199269 / 2298.33436954)
=0.42417379 / 0.41654179
=1.0183

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 - (663.830895795 + 122.060329068) / 1524.84277879) / (1 - (587.66733871 + 115.921370968) / 1476.04334677)
=0.48460836 / 0.52332788
=0.926

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
=2298.33436954 / 2021.00555471
=1.1372

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))
=(48.03901067 / (48.03901067 + 115.921370968)) / (51.2369673258 / (51.2369673258 + 122.060329068))
=0.29299158 / 0.29565936
=0.991

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)
=(712.236715998 / 2298.33436954) / (634.370125674 / 2021.00555471)
=0.30989256 / 0.31388836
=0.9873

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)
=((183.677330896 + 372.014625229) / 1524.84277879) / ((258.475806452 + 343.528225806) / 1476.04334677)
=0.36442574 / 0.40784983
=0.8935

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
=(139.619688045 - 3.94014968258 - 256.355879218) / 1524.84277879
=-0.0791

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.

Stantec, Inc. has a M-score of -2.85 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 own currency.

Stantec, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.80270.96740.77961.12360.67480.89441.92830.81410.98760.8881
GMI 1.56881.1560.94971.00191.05941.01170.81951.2380.9931.0189
AQI 1.16611.58871.04241.02860.98311.10991.00190.96241.00620.926
SGI 1.03311.45681.29921.36191.16771.31910.84731.34731.13451.0843
DEPI 0.6541.03840.81131.2220.81750.86291.06380.48951.89981.0257
SGAI 0.55620.8411.04011.02850.93690.99061.21950.80591.00670.9872
LVGI 0.83550.93330.71011.39511.19140.95461.04390.94790.95970.8935
TATA -0.1316-0.0276-0.0553-0.0273-0.1116-0.0412-0.0187-0.077-0.0399-0.0784
M-score -1.87-1.86-2.62-2.27-3.20-2.43-1.99-2.60-2.44-2.85

Stantec, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.22520.77670.86330.89021.04420.94620.91420.89110.84660.8468
GMI 1.10691.23781.16771.11161.00671.06951.07611.07411.12221.0183
AQI 1.04590.96240.93790.9320.94251.00620.97920.98140.93080.926
SGI 1.30131.41211.28331.18541.08931.18411.21281.2331.28441.1372
DEPI 0.90120.48070.49870.52230.54571.91331.88311.92921.93340.991
SGAI 0.91030.80610.85310.89750.99570.93450.92680.92780.88310.9873
LVGI 0.91030.94790.9730.97151.02630.95970.9630.93390.90830.8935
TATA -0.0013-0.0753-0.0821-0.0934-0.0989-0.0396-0.0398-0.0453-0.0532-0.0791
M-score -1.90-2.57-2.70-2.85-2.90-2.38-2.40-2.41-2.42-2.85
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