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Acuity Brands Inc (NYSE:AYI)
Beneish M-Score
-2.43 (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.

Acuity Brands Inc has a M-score of -2.43 suggests that the company is not a manipulator.

AYI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.94   Max: -2.1
Current: -2.43

-2.94
-2.1

During the past 13 years, the highest Beneish M-Score of Acuity Brands Inc was -2.10. The lowest was -2.94. And the median was -2.58.


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 Acuity Brands 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 * 0.9406+0.528 * 1.0017+0.404 * 0.8683+0.892 * 1.1607+0.115 * 0.88
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9943+4.679 * 0.0003-0.327 * 0.9095
=-2.43

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

This Year (Feb17) TTM:Last Year (Feb16) TTM:
Accounts Receivable was $501 Mil.
Revenue was 804.7 + 851.2 + 925.4 + 851.5 = $3,433 Mil.
Gross Profit was 335.8 + 359.6 + 402 + 377.9 = $1,475 Mil.
Total Current Assets was $1,364 Mil.
Total Assets was $2,999 Mil.
Property, Plant and Equipment(Net PPE) was $278 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $969 Mil.
Total Current Liabilities was $547 Mil.
Long-Term Debt was $356 Mil.
Net Income was 67.3 + 81.7 + 82.9 + 74 = $306 Mil.
Non Operating Income was -0.6 + 7.9 + 0.1 + -0.3 = $7 Mil.
Cash Flow from Operations was 32.9 + 38.7 + 101.8 + 124.4 = $298 Mil.
Accounts Receivable was $459 Mil.
Revenue was 777.8 + 736.6 + 759.5 + 683.7 = $2,958 Mil.
Gross Profit was 336.9 + 319.4 + 321.3 + 295.6 = $1,273 Mil.
Total Current Assets was $998 Mil.
Total Assets was $2,620 Mil.
Property, Plant and Equipment(Net PPE) was $257 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $840 Mil.
Total Current Liabilities was $513 Mil.
Long-Term Debt was $354 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)
=(500.9 / 3432.8) / (458.8 / 2957.6)
=0.14591587 / 0.15512578
=0.9406

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)
=(1273.2 / 2957.6) / (1475.3 / 3432.8)
=0.43048418 / 0.42976579
=1.0017

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 - (1363.9 + 277.8) / 2999.1) / (1 - (997.7 + 256.6) / 2619.8)
=0.45260245 / 0.52122299
=0.8683

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
=3432.8 / 2957.6
=1.1607

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))
=(54 / (54 + 256.6)) / (68.4 / (68.4 + 277.8))
=0.17385705 / 0.19757366
=0.88

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)
=(968.9 / 3432.8) / (839.6 / 2957.6)
=0.28224773 / 0.28387882
=0.9943

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)
=((355.8 + 546.8) / 2999.1) / ((353.5 + 513.4) / 2619.8)
=0.30095695 / 0.33090312
=0.9095

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
=(305.9 - 7.1 - 297.8) / 2999.1
=0.0003

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.

Acuity Brands Inc has a M-score of -2.43 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 local exchange's currency.

Acuity Brands Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 0.73621.13641.03371.14290.93270.93281.11681.02390.9751.1442
GMI 0.95881.05031.05050.94231.00020.99781.01630.980.96660.9699
AQI 1.06040.95861.60460.87861.04930.91410.93870.8640.88121.3667
SGI 1.05750.80080.81780.98171.10361.07691.08041.14571.13091.216
DEPI 0.81341.10620.88010.94310.95390.98391.02840.9761.06611.0968
SGAI 0.99540.82961.02921.11030.98990.9720.99260.97730.98391.0278
LVGI 0.9321.00020.74841.16240.95550.96470.93960.97820.94560.9697
TATA -0.0582-0.0537-0.0075-0.0475-0.0341-0.0332-0.004-0.0258-0.027-0.0192
M-score -2.94-2.73-2.31-2.75-2.58-2.65-2.31-2.51-2.55-2.10

Acuity Brands Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
DSRI 0.98941.01870.98170.9750.98621.1061.05261.14421.03180.9406
GMI 0.98530.97580.9560.96660.96540.96690.97640.96990.98351.0017
AQI 0.87010.86160.86750.88121.13781.42941.3941.36671.06430.8683
SGI 1.12991.13111.13511.13091.13371.16621.19481.2161.21821.1607
DEPI 1.021.02181.0381.06611.05951.25721.15241.09681.05190.88
SGAI 0.98420.99221.01250.98390.99641.00331.00371.02781.01280.9943
LVGI 0.95990.97220.97010.94560.94340.93170.9350.96970.94390.9095
TATA -0.0246-0.025-0.0238-0.027-0.0209-0.0282-0.0346-0.0192-0.01280.0003
M-score -2.53-2.52-2.55-2.55-2.41-2.16-2.23-2.10-2.28-2.43
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