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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 -2.43.
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 * 1.0985||+||0.528 * 0.992||+||0.404 * 1.0383||+||0.892 * 1.0026||+||0.115 * 0.7911|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0207||+||4.679 * 0.0028||-||0.327 * 0.9538|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $420 Mil.|
Revenue was 565.964872607 + 574.406793368 + 559.298621018 + 561.499306278 = $2,261 Mil.
Gross Profit was 254.605005277 + 259.425798625 + 259.273260422 + 250.578390565 = $1,024 Mil.
Total Current Assets was $712 Mil.
Total Assets was $1,742 Mil.
Property, Plant and Equipment(Net PPE) was $119 Mil.
Depreciation, Depletion and Amortization(DDA) was $65 Mil.
Selling, General & Admin. Expense(SGA) was $773 Mil.
Total Current Liabilities was $419 Mil.
Long-Term Debt was $196 Mil.
Net Income was 37.6428463742 + 34.9106348564 + 30.0816294183 + 33.0098855359 = $136 Mil.
Non Operating Income was -0.196743554953 + 5.20177921553 + -0.314629893803 + 0.673777315297 = $5 Mil.
Cash Flow from Operations was 63.3891150309 + 49.0165790538 + -69.9461087336 + 83.0055497745 = $125 Mil.
|Accounts Receivable was $382 Mil.
Revenue was 612.737262737 + 585.243767313 + 516.555355536 + 540.707706767 = $2,255 Mil.
Gross Profit was 270.430478612 + 267.79501385 + 235.493249325 + 239.315789474 = $1,013 Mil.
Total Current Assets was $738 Mil.
Total Assets was $1,767 Mil.
Property, Plant and Equipment(Net PPE) was $139 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $755 Mil.
Total Current Liabilities was $437 Mil.
Long-Term Debt was $217 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)|
|=||(420.188451681 / 2261.16959327)||/||(381.516665153 / 2255.24409235)|
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)|
|=||(259.425798625 / 2255.24409235)||/||(254.605005277 / 2261.16959327)|
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 - (712.360922659 + 118.972561435) / 1742.36016885)||/||(1 - (738.322586504 + 138.968304423) / 1767.30633003)|
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))|
|=||(53.6378636693 / (53.6378636693 + 138.968304423))||/||(64.6286327448 / (64.6286327448 + 118.972561435))|
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)|
|=||(772.786769745 / 2261.16959327)||/||(755.137533159 / 2255.24409235)|
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)|
|=||((196.284486658 + 419.353233831) / 1742.36016885)||/||((217.310870947 + 437.382617383) / 1767.30633003)|
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|
|=||(135.644996185 - 5.36418308207||-||125.465135126)||/||1742.36016885|
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 -2.38 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