ACDVF (Air Canada) Beneish M-Score : -2.65 (As of Dec. 13, 2024)

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What is Air Canada Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.65 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Air Canada's Beneish M-Score or its related term are showing as below:

ACDVF' s Beneish M-Score Range Over the Past 10 Years
Min: -8.83 Med: -2.84 Max: 14.96
Current: -2.65

During the past 13 years, the highest Beneish M-Score of Air Canada was 14.96. The lowest was -8.83. And the median was -2.84.

Air Canada Beneish M-Score Historical Data

The historical data trend for Air Canada's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Air Canada Beneish M-Score Chart

Air Canada Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.85

-3.10

-2.13

-3.16

-2.94

Air Canada Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.81	-2.94	-2.94	-2.83	-2.65

Competitive Comparison of Air Canada's Beneish M-Score

For the Airlines subindustry, Air Canada's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Air Canada's Beneish M-Score Distribution in the Transportation Industry

For the Transportation industry and Industrials sector, Air Canada's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Air Canada's Beneish M-Score falls into.

Air Canada Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Air Canada for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.955

0.528 * 1.0818

0.404 * 1.1116

0.892 * 1.0293

0.115 * 0.9878

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.024

4.679 * -0.056621

0.327 * 0.9054

-2.65

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was $868 Mil.
Revenue was 4507.604 + 4026.997 + 3860.816 + 3857.335 = $16,253 Mil.
Gross Profit was 1570.943 + 1059.467 + 783.836 + 778.921 = $4,193 Mil.
Total Current Assets was $7,573 Mil.
Total Assets was $23,251 Mil.
Property, Plant and Equipment(Net PPE) was $9,104 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,314 Mil.
Selling, General, & Admin. Expense(SGA) was $1,258 Mil.
Total Current Liabilities was $8,213 Mil.
Long-Term Debt & Capital Lease Obligation was $7,911 Mil.
Net Income was 1502.288 + 299.161 + -59.84 + 137.15 = $1,879 Mil.
Non Operating Income was -63.487 + 10.945 + 6.649 + 112.552 = $67 Mil.
Cash Flow from Operations was 544.072 + 674.206 + 1176.123 + 734.198 = $3,129 Mil.

Total Receivables was $883 Mil.
Revenue was 4688.493 + 4084.751 + 3571.585 + 3444.976 = $15,790 Mil.
Gross Profit was 1805.484 + 1299.865 + 683.33 + 618.329 = $4,407 Mil.
Total Current Assets was $7,668 Mil.
Total Assets was $21,947 Mil.
Property, Plant and Equipment(Net PPE) was $8,697 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,238 Mil.
Selling, General, & Admin. Expense(SGA) was $1,194 Mil.
Total Current Liabilities was $6,897 Mil.
Long-Term Debt & Capital Lease Obligation was $9,913 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(868.153 / 16252.752)	/	(883.157 / 15789.805)
	=	0.053416	/	0.055932
	=	0.955

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)
	=	(4407.008 / 15789.805)	/	(4193.167 / 16252.752)
	=	0.279105	/	0.257997
	=	1.0818

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (7572.715 + 9103.794) / 23251.144)	/	(1 - (7667.578 + 8697.066) / 21947.38)
	=	0.282766	/	0.254369
	=	1.1116

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	16252.752	/	15789.805
	=	1.0293

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(1238.129 / (1238.129 + 8697.066))	/	(1314.345 / (1314.345 + 9103.794))
	=	0.124621	/	0.126159
	=	0.9878

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(1258.186 / 16252.752)	/	(1193.676 / 15789.805)
	=	0.077414	/	0.075598
	=	1.024

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((7910.822 + 8213.495) / 23251.144)	/	((9912.793 + 6896.756) / 21947.38)
	=	0.693485	/	0.765902
	=	0.9054

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
	=	(1878.759 - 66.659	-	3128.599)	/	23251.144
	=	-0.056621

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Air Canada has a M-score of -2.65 suggests that the company is unlikely to be a manipulator.

Air Canada Beneish M-Score Related Terms

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Air Canada Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

0SE9:UK ADH2:Germany AC:Canada ADH2:Bulgaria

Address

7373 Cote Vertu Boulevard West, Air Canada Centre, Saint-Laurent, QC, CAN, H4S 1Z3

Website

https://www.aircanada.com

Air Canada is Canada's largest airline, serving nearly 50 million passengers each year together with its low-cost sub-brand called Rouge and contracts for regional connection flights to its network. Air Canada is a sixth-freedom airline, which flies many US-based passengers on long-haul trips with a layover in Canada.