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TransDigm Group Beneish M-Score

: -2.55 (As of Today)
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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.

TransDigm Group has a M-score of -2.55 suggests that the company is not a manipulator.

NYSE:TDG' s Beneish M-Score Range Over the Past 10 Years
Min: -2.73   Med: -2.4   Max: -1.77
Current: -2.55

-2.73
-1.77

During the past 13 years, the highest Beneish M-Score of TransDigm Group was -1.77. The lowest was -2.73. And the median was -2.40.


TransDigm Group Beneish M-Score Historical Data

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

* Premium members only.

TransDigm Group Annual Data
Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.21 -2.29 -2.56 -2.40 -2.05

TransDigm Group Quarterly Data
Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.82 -1.87 -2.05 -2.08 -2.55

Competitive Comparison
* 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.


TransDigm Group Beneish M-Score Distribution

* The bar in red indicates where TransDigm Group's Beneish M-Score falls into.



TransDigm Group 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 TransDigm Group 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 * 0.6174+0.528 * 1.0532+0.404 * 0.9973+0.892 * 1.4178+0.115 * 0.5748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1279+4.679 * 0.0012-0.327 * 1.1493
=-2.55

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

This Year (Mar20) TTM:Last Year (Mar19) TTM:
Accounts Receivable was USD 999 Mil.
Revenue was 1443 + 1465 + 1375.644 + 1658.319 = USD 5,942 Mil.
Gross Profit was 818 + 801 + 824.36 + 761.474 = USD 3,205 Mil.
Total Current Assets was USD 5,200 Mil.
Total Assets was USD 16,635 Mil.
Property, Plant and Equipment(Net PPE) was USD 748 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 293 Mil.
Selling, General, & Admin. Expense(SGA) was USD 779 Mil.
Total Current Liabilities was USD 1,656 Mil.
Long-Term Debt & Capital Lease Obligation was USD 17,933 Mil.
Net Income was 319 + 304 + 346.87 + 144.45 = USD 1,114 Mil.
Non Operating Income was -7 + -2 + -16.805 + -36.211 = USD -62 Mil.
Cash Flow from Operations was 161 + 433 + 247.116 + 315.356 = USD 1,156 Mil.
Accounts Receivable was USD 1,141 Mil.
Revenue was 1168 + 993 + 1049.434 + 980.662 = USD 4,191 Mil.
Gross Profit was 650 + 564 + 597.266 + 569.52 = USD 2,381 Mil.
Total Current Assets was USD 5,596 Mil.
Total Assets was USD 17,797 Mil.
Property, Plant and Equipment(Net PPE) was USD 738 Mil.
(DDA) was USD 142 Mil.
Selling, General, & Admin. Expense(SGA) was USD 487 Mil.
Total Current Liabilities was USD 1,726 Mil.
Long-Term Debt & Capital Lease Obligation was USD 16,509 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(999 / 5941.963) / (1141.249 / 4191.096)
=0.16812626 / 0.27230324
=0.6174

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)
=(2380.786 / 4191.096) / (3204.834 / 5941.963)
=0.56805809 / 0.5393561
=1.0532

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 - (5200 + 748) / 16635) / (1 - (5595.529 + 737.599) / 17797.156)
=0.64244064 / 0.64414944
=0.9973

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
=5941.963 / 4191.096
=1.4178

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))
=(142.235 / (142.235 + 737.599)) / (292.7 / (292.7 + 748))
=0.16166118 / 0.281253
=0.5748

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(779.1 / 5941.963) / (487.2 / 4191.096)
=0.13111829 / 0.11624644
=1.1279

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)
=((17933 + 1656) / 16635) / ((16509.181 + 1726.193) / 17797.156)
=1.1775774 / 1.02462292
=1.1493

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
=(1114.32 - -62.016 - 1156.472) / 16635
=0.0012

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.

TransDigm Group has a M-score of -2.55 suggests that the company will not be a manipulator.


TransDigm Group Beneish M-Score Headlines

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