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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 Stantec Inc was -0.07. The lowest was -3.04. And the median was -2.44.
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 * 0.9757||+||0.528 * 0.9961||+||0.404 * 1.0401||+||0.892 * 1.0568||+||0.115 * 0.9744|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0023||+||4.679 * -0.0223||-||0.327 * 0.9979|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $365 Mil.|
Revenue was 561.499306278 + 612.737262737 + 585.243767313 + 516.555355536 = $2,276 Mil.
Gross Profit was 250.578390565 + 270.430478612 + 267.79501385 + 235.493249325 = $1,024 Mil.
Total Current Assets was $732 Mil.
Total Assets was $1,743 Mil.
Property, Plant and Equipment(Net PPE) was $132 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $761 Mil.
Total Current Liabilities was $412 Mil.
Long-Term Debt was $222 Mil.
Net Income was 33.0098855359 + 44.1313232222 + 40.9095106187 + 30.1827182718 = $148 Mil.
Non Operating Income was 3.52323968089 + -1.24602670057 + 0.0240073868883 + 0.220522052205 = $3 Mil.
Cash Flow from Operations was 83.0055497745 + 87.6232858051 + 17.2132963989 + -3.26282628263 = $185 Mil.
|Accounts Receivable was $354 Mil.
Revenue was 540.707706767 + 562.056092843 + 549.683802134 + 501.178710938 = $2,154 Mil.
Gross Profit was 239.315789474 + 254.343326886 + 246.850630456 + 224.928710938 = $965 Mil.
Total Current Assets was $683 Mil.
Total Assets was $1,568 Mil.
Property, Plant and Equipment(Net PPE) was $126 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $718 Mil.
Total Current Liabilities was $383 Mil.
Long-Term Debt was $189 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)|
|=||(364.557752341 / 2276.03569186)||/||(353.532894737 / 2153.62631268)|
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)|
|=||(270.430478612 / 2153.62631268)||/||(250.578390565 / 2276.03569186)|
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 - (732.238120014 + 132.420221991) / 1743.38362817)||/||(1 - (682.547932331 + 125.501879699) / 1567.83646617)|
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))|
|=||(51.660030399 / (51.660030399 + 125.501879699))||/||(56.5514796552 / (56.5514796552 + 132.420221991))|
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)|
|=||(760.998884313 / 2276.03569186)||/||(718.405917064 / 2153.62631268)|
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)|
|=||((222.071626778 + 411.957162678) / 1743.38362817)||/||((188.856203008 + 382.503759398) / 1567.83646617)|
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|
|=||(148.233437649 - 2.52174241941||-||184.579305696)||/||1743.38362817|
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 -2.54 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
Stantec Inc Annual Data
Stantec Inc Quarterly Data