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GuruFocus has detected 4 Warning Signs with Invesco Ltd $IVZ.
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Invesco Ltd (NYSE:IVZ)
Beneish M-Score
-2.61 (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.

Invesco Ltd has a M-score of -2.61 suggests that the company is not a manipulator.

IVZ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.48   Max: -0.54
Current: -2.61

-3.48
-0.54

During the past 13 years, the highest Beneish M-Score of Invesco Ltd was -0.54. The lowest was -3.48. And the median was -2.48.


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 Invesco Ltd 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 * 1.0671+0.528 * 1+0.404 * 0.5955+0.892 * 0.9595+0.115 * 1.0119
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0231+4.679 * 0.009-0.327 * 1.0965
=-2.61

* 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 $669 Mil.
Revenue was 1192.6 + 1194.7 + 1201.6 + 1189.4 = $4,778 Mil.
Gross Profit was 1192.6 + 1194.7 + 1201.6 + 1189.4 = $4,778 Mil.
Total Current Assets was $13,584 Mil.
Total Assets was $26,599 Mil.
Property, Plant and Equipment(Net PPE) was $468 Mil.
Depreciation, Depletion and Amortization(DDA) was $103 Mil.
Selling, General & Admin. Expense(SGA) was $3,618 Mil.
Total Current Liabilities was $11,310 Mil.
Long-Term Debt was $6,367 Mil.
Net Income was 212 + 226.5 + 241.2 + 225.5 = $905 Mil.
Non Operating Income was 52.4 + 36.8 + 60.7 + 38.3 = $188 Mil.
Cash Flow from Operations was 315.9 + -412.8 + 367.5 + 206.8 = $477 Mil.
Accounts Receivable was $654 Mil.
Revenue was 1148.7 + 1239.7 + 1273.5 + 1318.1 = $4,980 Mil.
Gross Profit was 1148.7 + 1239.7 + 1273.5 + 1318.1 = $4,980 Mil.
Total Current Assets was $4,280 Mil.
Total Assets was $22,658 Mil.
Property, Plant and Equipment(Net PPE) was $429 Mil.
Depreciation, Depletion and Amortization(DDA) was $96 Mil.
Selling, General & Admin. Expense(SGA) was $3,685 Mil.
Total Current Liabilities was $8,598 Mil.
Long-Term Debt was $5,134 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)
=(669.1 / 4778.3) / (653.5 / 4980)
=0.14002888 / 0.1312249
=1.0671

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)
=(4980 / 4980) / (4778.3 / 4778.3)
=1 / 1
=1

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 - (13583.8 + 467.9) / 26598.9) / (1 - (4280 + 428.9) / 22658.2)
=0.47171876 / 0.79217678
=0.5955

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
=4778.3 / 4980
=0.9595

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))
=(95.6 / (95.6 + 428.9)) / (102.8 / (102.8 + 467.9))
=0.18226883 / 0.18012967
=1.0119

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)
=(3617.7 / 4778.3) / (3685.3 / 4980)
=0.75711027 / 0.74002008
=1.0231

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)
=((6366.5 + 11310.3) / 26598.9) / ((5134.4 + 8598.1) / 22658.2)
=0.66456884 / 0.60607197
=1.0965

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
=(905.2 - 188.2 - 477.4) / 26598.9
=0.009

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.

Invesco Ltd has a M-score of -2.61 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.

Invesco Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.86340.62111.5221.51940.78480.99680.91971.14140.99681.0031
GMI 0.922111111111
AQI 0.97221.1120.9431.12091.01041.03230.82321.14790.71050.9091
SGI 1.19470.85270.79431.32751.14181.02361.13951.10820.99530.9242
DEPI 0.54521.06010.95220.99290.961.27721.06161.10771.01051.0056
SGAI 1.11111.13621.05391.01860.9371.01790.95760.99090.97731.0227
LVGI 1.07090.79890.91811.83110.96680.9291.12730.99991.20641.0495
TATA -0.03960.00070.0029-0.0041-0.0091-0.00470.003-0.0191-0.00630.0238
M-score -2.76-2.86-2.18-1.96-2.57-2.42-2.51-2.27-2.70-2.49

Invesco Ltd Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.14140.83640.951.00890.99681.05461.17440.93411.00311.0671
GMI 1111111111
AQI 1.14790.86531.03861.02140.71051.25210.64510.63850.90910.5955
SGI 1.10821.07651.04861.01260.99530.96340.93340.92630.92420.9595
DEPI 1.10771.12561.12891.09831.01051.01010.97360.97021.00561.0119
SGAI 0.99090.95250.96360.95780.97731.00711.01571.03271.02271.0231
LVGI 0.99991.12441.11761.17491.20641.0621.11011.03971.04951.0965
TATA -0.0191-0.0225-0.00860.0071-0.0063-0.00850.0022-0.01160.02380.009
M-score -2.27-2.74-2.52-2.46-2.70-2.42-2.55-2.83-2.49-2.61
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