ADT Beneish M-Score Historical Data
The historical data trend for ADT'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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ADT Annual Data
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Trend |
Dec14 |
Dec15 |
Dec16 |
Dec17 |
Dec18 |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
Dec23 |
| Beneish M-Score |
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-2.92 |
-2.87 |
-2.39 |
-2.74 |
-2.70 |
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ADT Quarterly Data
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Mar19 |
Jun19 |
Sep19 |
Dec19 |
Mar20 |
Jun20 |
Sep20 |
Dec20 |
Mar21 |
Jun21 |
Sep21 |
Dec21 |
Mar22 |
Jun22 |
Sep22 |
Dec22 |
Mar23 |
Jun23 |
Sep23 |
Dec23 |
| Beneish M-Score |
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-2.74 |
-2.48 |
-2.56 |
-2.92 |
-2.70 |
Competitive Comparison
For the Security & Protection Services subindustry, ADT'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.
ADT Beneish M-Score Distribution
For the Business Services industry and Industrials sector, ADT's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where ADT's Beneish M-Score falls into.
ADT 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 ADT 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 * 0.904 | + | 0.528 * 0.973 | + | 0.404 * 1.0119 | + | 0.892 * 0.9848 | + | 0.115 * 1.1599 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9514 | + | 4.679 * -0.038024 | - | 0.327 * 0.8659 |
| = | -2.70 |
* 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.
| This Year (Dec23) TTM: | Last Year (Dec22) TTM: |
Total Receivables was $435 Mil.
Revenue was 1222.255 + 1237.484 + 1593.128 + 1612.354 = $5,665 Mil.
Gross Profit was 993.185 + 1000.664 + 1109.452 + 1098.353 = $4,202 Mil.
Total Current Assets was $1,005 Mil.
Total Assets was $15,964 Mil.
Property, Plant and Equipment(Net PPE) was $3,289 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,389 Mil.
Selling, General, & Admin. Expense(SGA) was $1,680 Mil.
Total Current Liabilities was $1,480 Mil.
Long-Term Debt & Capital Lease Obligation was $7,523 Mil.
Net Income was 575.872 + -86.237 + 92.211 + -118.837 = $463 Mil.
Non Operating Income was -24.486 + -104.002 + -198.75 + -260.467 = $-588 Mil.
Cash Flow from Operations was 412.032 + 446.259 + 492.795 + 306.64 = $1,658 Mil.
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Total Receivables was $488 Mil.
Revenue was 1317.326 + 1289.793 + 1601.03 + 1544.747 = $5,753 Mil.
Gross Profit was 1012.092 + 1011.138 + 1093.217 + 1034.979 = $4,151 Mil.
Total Current Assets was $1,722 Mil.
Total Assets was $17,821 Mil.
Property, Plant and Equipment(Net PPE) was $3,225 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,694 Mil.
Selling, General, & Admin. Expense(SGA) was $1,793 Mil.
Total Current Liabilities was $2,661 Mil.
Long-Term Debt & Capital Lease Obligation was $8,947 Mil.
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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) |
| = | (434.671 / 5665.221) | / | (488.276 / 5752.896) |
| = | 0.076726 | / | 0.084875 |
| | = | 0.904 |
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) |
| = | (4151.426 / 5752.896) | / | (4201.654 / 5665.221) |
| = | 0.721624 | / | 0.741658 |
| | = | 0.973 |
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 - (1004.694 + 3289.106) / 15964.094) | / | (1 - (1721.996 + 3224.731) / 17821.236) |
| = | 0.731034 | / | 0.722425 |
| | = | 1.0119 |
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 |
| = | 5665.221 | / | 5752.896 |
| | = | 0.9848 |
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)) |
| = | (1693.575 / (1693.575 + 3224.731)) | / | (1388.671 / (1388.671 + 3289.106)) |
| = | 0.344341 | / | 0.296866 |
| | = | 1.1599 |
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) |
| = | (1680.091 / 5665.221) | / | (1793.215 / 5752.896) |
| = | 0.296562 | / | 0.311706 |
| | = | 0.9514 |
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) |
| = | ((7523.349 + 1480.208) / 15964.094) | / | ((8946.719 + 2661.103) / 17821.236) |
| = | 0.563988 | / | 0.651348 |
| | = | 0.8659 |
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 |
| = | (463.009 - -587.705 | - | 1657.726) | / | 15964.094 |
| | = | -0.038024 |
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.
ADT has a M-score of -2.70 suggests that the company is unlikely to be a manipulator.
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