AAR Beneish M-Score Historical Data
The historical data trend for AAR'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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AAR Annual Data
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|
Trend |
May13 |
May14 |
May15 |
May16 |
May17 |
May18 |
May19 |
May20 |
May21 |
May22 |
| Beneish M-Score |
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|
|
|
|
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-2.84 |
-2.40 |
-2.62 |
-2.38 |
-2.31 |
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AAR Quarterly Data
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Aug17 |
Nov17 |
Feb18 |
May18 |
Aug18 |
Nov18 |
Feb19 |
May19 |
Aug19 |
Nov19 |
Feb20 |
May20 |
Aug20 |
Nov20 |
Feb21 |
May21 |
Aug21 |
Nov21 |
Feb22 |
May22 |
| Beneish M-Score |
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|
|
|
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|
|
|
|
|
|
|
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|
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-2.38 |
-2.34 |
-2.34 |
-2.33 |
-2.31 |
Competitive Comparison
For the Aerospace & Defense subindustry, AAR'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.
AAR Beneish M-Score Distribution
For the Aerospace & Defense industry and Industrials sector, AAR's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where AAR's Beneish M-Score falls into.
AAR 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 AAR 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 * 1.0943 | + | 0.528 * 0.9703 | + | 0.404 * 0.9235 | + | 0.892 * 1.1015 | + | 0.115 * 1.0192 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0064 | + | 4.679 * 0.0035 | - | 0.327 * 0.9305 |
| = | -2.31 |
* 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 (May22) TTM: | Last Year (May21) TTM: |
Total Receivables was $288 Mil.
Revenue was 476.1 + 452.2 + 436.6 + 455.1 = $1,820 Mil.
Gross Profit was 89.8 + 80.4 + 78.4 + 64.6 = $313 Mil.
Total Current Assets was $1,007 Mil.
Total Assets was $1,574 Mil.
Property, Plant and Equipment(Net PPE) was $183 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General, & Admin. Expense(SGA) was $202 Mil.
Total Current Liabilities was $348 Mil.
Long-Term Debt & Capital Lease Obligation was $156 Mil.
Net Income was 23.9 + 22.5 + 20.8 + 11.5 = $79 Mil.
Non Operating Income was -1.5 + 0 + -1.4 + 0.9 = $-2 Mil.
Cash Flow from Operations was 40.1 + 15.9 + 16.3 + 2.9 = $75 Mil.
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Total Receivables was $239 Mil.
Revenue was 437.6 + 410.3 + 403.6 + 400.8 = $1,652 Mil.
Gross Profit was 71.8 + 86 + 69.5 + 48.6 = $276 Mil.
Total Current Assets was $937 Mil.
Total Assets was $1,540 Mil.
Property, Plant and Equipment(Net PPE) was $196 Mil.
Depreciation, Depletion and Amortization(DDA) was $36 Mil.
Selling, General, & Admin. Expense(SGA) was $182 Mil.
Total Current Liabilities was $337 Mil.
Long-Term Debt & Capital Lease Obligation was $194 Mil.
|
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) |
| = | (287.6 / 1820) | / | (238.6 / 1652.3) |
| = | 0.15802198 | / | 0.14440477 |
| | = | 1.0943 |
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) |
| = | (275.9 / 1652.3) | / | (313.2 / 1820) |
| = | 0.16697936 | / | 0.17208791 |
| | = | 0.9703 |
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 - (1007.2 + 182.6) / 1573.9) | / | (1 - (937 + 195.8) / 1539.7) |
| = | 0.24404346 | / | 0.26427226 |
| | = | 0.9235 |
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 |
| = | 1820 | / | 1652.3 |
| | = | 1.1015 |
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)) |
| = | (36.3 / (36.3 + 195.8)) | / | (33.1 / (33.1 + 182.6)) |
| = | 0.1563981 | / | 0.15345387 |
| | = | 1.0192 |
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) |
| = | (202.2 / 1820) | / | (182.4 / 1652.3) |
| = | 0.1110989 | / | 0.11039158 |
| | = | 1.0064 |
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) |
| = | ((156.3 + 348.2) / 1573.9) | / | ((193.6 + 336.8) / 1539.7) |
| = | 0.32054133 | / | 0.34448269 |
| | = | 0.9305 |
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 |
| = | (78.7 - -2 | - | 75.2) | / | 1573.9 |
| | = | 0.0035 |
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.
AAR has a M-score of -2.31 suggests that the company is unlikely to be a manipulator.
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