Switch to:
GuruFocus has detected 4 Warning Signs with Aspen Technology Inc $AZPN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Aspen Technology Inc (NAS:AZPN)
Beneish M-Score
-0.80 (As of Today)

Warning Sign:

Beneish M-Score -0.8 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Aspen Technology Inc has a M-score of -0.80 signals that the company is a manipulator.

AZPN' s Beneish M-Score Range Over the Past 10 Years
Min: -5.05   Max: -0.63
Current: -0.8

-5.05
-0.63

During the past 13 years, the highest Beneish M-Score of Aspen Technology Inc was -0.63. The lowest was -5.05. And the median was -2.85.


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 Aspen Technology 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 * 1.6178+0.528 * 0.9943+0.404 * 5.2287+0.892 * 1.0002+0.115 * 0.8783
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9513+4.679 * -0.0655-0.327 * 1.8488
=-0.80

* 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 $35.2 Mil.
Revenue was 119.277 + 119.933 + 120.05 + 113.68 = $472.9 Mil.
Gross Profit was 107.01 + 108.354 + 108.544 + 101.949 = $425.9 Mil.
Total Current Assets was $147.1 Mil.
Total Assets was $244.0 Mil.
Property, Plant and Equipment(Net PPE) was $14.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.5 Mil.
Selling, General & Admin. Expense(SGA) was $139.5 Mil.
Total Current Liabilities was $427.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 35.834 + 37.01 + 35 + 33.326 = $141.2 Mil.
Non Operating Income was -0.056 + 0.697 + 0.646 + 1.976 = $3.3 Mil.
Cash Flow from Operations was 55.621 + 27.167 + 26.25 + 44.849 = $153.9 Mil.
Accounts Receivable was $21.7 Mil.
Revenue was 119.217 + 119.151 + 120.296 + 114.186 = $472.9 Mil.
Gross Profit was 107.197 + 107.263 + 107.324 + 101.565 = $423.3 Mil.
Total Current Assets was $395.0 Mil.
Total Assets was $439.4 Mil.
Property, Plant and Equipment(Net PPE) was $15.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.1 Mil.
Selling, General & Admin. Expense(SGA) was $146.6 Mil.
Total Current Liabilities was $416.3 Mil.
Long-Term Debt was $0.0 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)
=(35.192 / 472.94) / (21.749 / 472.85)
=0.07441113 / 0.04599556
=1.6178

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)
=(423.349 / 472.85) / (425.857 / 472.94)
=0.89531352 / 0.90044615
=0.9943

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 - (147.052 + 14.154) / 243.952) / (1 - (394.987 + 15.938) / 439.431)
=0.33918968 / 0.06487025
=5.2287

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
=472.94 / 472.85
=1.0002

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))
=(6.119 / (6.119 + 15.938)) / (6.535 / (6.535 + 14.154))
=0.2774176 / 0.31586834
=0.8783

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)
=(139.486 / 472.94) / (146.6 / 472.85)
=0.29493382 / 0.31003489
=0.9513

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)
=((0 + 427.275) / 243.952) / ((0 + 416.298) / 439.431)
=1.7514716 / 0.94735692
=1.8488

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
=(141.17 - 3.263 - 153.887) / 243.952
=-0.0655

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.

Aspen Technology Inc has a M-score of -0.80 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.

Aspen Technology Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.70442.0121.31721.36650.28030.91980.91830.82870.70870.6214
GMI 0.92550.99910.96111.25570.81890.93740.93640.96870.97520.9892
AQI 0.99151.01181.07670.87221.06350.73760.86340.74060.61650.9498
SGI 1.16170.91470.99990.53391.19121.2271.28071.25711.1251.0725
DEPI 1.37521.35170.81511.06061.01411.03191.07030.98311.58940.9254
SGAI 0.98761.16730.92322.10820.78480.81570.74430.78270.8940.9571
LVGI 1.36690.81490.78911.13410.86921.19731.05941.16041.43911.0964
TATA -0.018-0.08880.0421-0.364-0.1359-0.312-0.2617-0.2747-0.2308-0.0329
M-score -2.81-1.96-1.92-4.41-3.60-3.98-3.59-3.83-3.94-2.98

Aspen Technology Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.54140.78960.70870.80290.68190.70060.62140.95621.19281.6178
GMI 0.97940.97170.97520.97940.97910.98680.98920.98810.99110.9943
AQI 1.01910.84540.61650.69610.61250.51160.94981.51372.98085.2287
SGI 1.20371.14621.1251.10351.10691.10541.07251.04081.01711.0002
DEPI 1.7681.67441.58941.33670.8590.88160.92540.94440.91590.8783
SGAI 0.79560.84390.8940.92720.95150.95170.95710.97540.97610.9513
LVGI 1.14741.37421.43911.54291.24581.08891.09641.43451.74021.8488
TATA -0.2729-0.2595-0.2308-0.1657-0.0904-0.05-0.0329-0.0798-0.1126-0.0655
M-score -3.92-3.85-3.94-3.60-3.36-3.13-2.98-2.80-2.27-0.80
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK