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GuruFocus has detected 1 Warning Sign with Astec Industries Inc $ASTE.
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Astec Industries Inc (NAS:ASTE)
Beneish M-Score
-2.20 (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.

Astec Industries Inc has a M-score of -2.20 signals that the company is a manipulator.

ASTE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.4   Max: -0.74
Current: -2.2

-4.4
-0.74

During the past 13 years, the highest Beneish M-Score of Astec Industries Inc was -0.74. The lowest was -4.40. And the median was -2.38.


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 Astec Industries 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 * 1.0675+0.528 * 1.0189+0.404 * 1.2706+0.892 * 1.2199+0.115 * 1.0032
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9173+4.679 * -0.0264-0.327 * 0.9524
=-2.20

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $152 Mil.
Revenue was 318.401 + 326.563 + 247.752 + 294.394 = $1,187 Mil.
Gross Profit was 75.771 + 64.472 + 55.389 + 73.452 = $269 Mil.
Total Current Assets was $606 Mil.
Total Assets was $874 Mil.
Property, Plant and Equipment(Net PPE) was $182 Mil.
Depreciation, Depletion and Amortization(DDA) was $25 Mil.
Selling, General & Admin. Expense(SGA) was $162 Mil.
Total Current Liabilities was $185 Mil.
Long-Term Debt was $4 Mil.
Net Income was 15.12 + 12.386 + 6.838 + 18.192 = $53 Mil.
Non Operating Income was 0.337 + -0.174 + 0.327 + 0.121 = $1 Mil.
Cash Flow from Operations was -14.722 + 38.033 + 32.72 + 18.99 = $75 Mil.
Accounts Receivable was $116 Mil.
Revenue was 278.721 + 215.016 + 211.35 + 268.042 = $973 Mil.
Gross Profit was 71.956 + 45.426 + 45.138 + 62.233 = $225 Mil.
Total Current Assets was $600 Mil.
Total Assets was $836 Mil.
Property, Plant and Equipment(Net PPE) was $171 Mil.
Depreciation, Depletion and Amortization(DDA) was $24 Mil.
Selling, General & Admin. Expense(SGA) was $145 Mil.
Total Current Liabilities was $183 Mil.
Long-Term Debt was $6 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)
=(151.538 / 1187.11) / (116.364 / 973.129)
=0.12765287 / 0.11957716
=1.0675

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)
=(224.753 / 973.129) / (269.084 / 1187.11)
=0.2309591 / 0.2266715
=1.0189

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 - (606.332 + 182.223) / 874.488) / (1 - (599.935 + 171.205) / 835.78)
=0.09826664 / 0.07734093
=1.2706

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
=1187.11 / 973.129
=1.2199

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))
=(23.908 / (23.908 + 171.205)) / (25.354 / (25.354 + 182.223))
=0.12253412 / 0.12214263
=1.0032

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)
=(162.461 / 1187.11) / (145.181 / 973.129)
=0.13685421 / 0.14918988
=0.9173

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)
=((3.599 + 184.635) / 874.488) / ((6.261 + 182.641) / 835.78)
=0.21525052 / 0.22601881
=0.9524

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
=(52.536 - 0.611 - 75.021) / 874.488
=-0.0264

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.

Astec Industries Inc has a M-score of -2.20 signals that the company is likely to 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 local exchange's currency.

Astec Industries Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.06590.75931.22171.17711.01890.84821.07921.09850.92780.9244
GMI 0.98111.00741.16030.87191.01741.04821.00051.00580.99150.9628
AQI 1.63140.82230.7360.88581.16890.95070.98421.42571.0431.2159
SGI 1.22291.12050.7580.99861.23281.03040.99651.04571.00781.1671
DEPI 0.98151.03540.94980.97751.0780.831.03970.93640.92781.0257
SGAI 0.9361.01711.1561.01910.98190.99950.98151.01481.01820.9038
LVGI 1.06690.8850.76651.1161.07010.92960.89571.17190.9031.0831
TATA 0.02070.0764-0.08-0.04650.010.01430.04170.0179-0.0014-0.095
M-score -1.89-2.27-2.84-2.69-2.14-2.52-2.18-2.16-2.51-2.79

Astec Industries Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.09851.06890.93140.92120.92780.97561.08161.01790.92441.0675
GMI 1.00591.01491.00670.97080.99150.94810.93620.94580.96281.0189
AQI 1.42571.40170.84730.91511.0431.03321.01721.39881.21591.2706
SGI 1.04571.11021.06661.04971.00780.94880.98331.0281.16711.2199
DEPI 0.93640.89670.85580.89010.92780.96811.02721.04371.02571.0032
SGAI 1.01480.93690.97860.99321.01821.07861.03030.99040.90390.9173
LVGI 1.17191.06350.93910.95010.9031.07641.16821.25111.08310.9524
TATA 0.01790.01650.01860.0092-0.0014-0.0426-0.0477-0.0705-0.095-0.0264
M-score -2.16-2.09-2.45-2.51-2.51-2.80-2.73-2.71-2.79-2.20
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