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Advanced Drainage Systems (Advanced Drainage Systems) Beneish M-Score : -2.96 (As of Apr. 26, 2024)


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What is Advanced Drainage Systems Beneish M-Score?

The zones of discrimination for M-Score is as such:

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.

Good Sign:

Beneish M-Score -2.96 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Advanced Drainage Systems's Beneish M-Score or its related term are showing as below:

WMS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.64   Med: -2.75   Max: -1.82
Current: -2.96

During the past 12 years, the highest Beneish M-Score of Advanced Drainage Systems was -1.82. The lowest was -3.64. And the median was -2.75.


Advanced Drainage Systems Beneish M-Score Historical Data

The historical data trend for Advanced Drainage Systems'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.

* Premium members only.

Advanced Drainage Systems Beneish M-Score Chart

Advanced Drainage Systems Annual Data
Trend Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.70 -2.65 -2.91 -2.00 -3.05

Advanced Drainage Systems Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Beneish M-Score Get a 7-Day Free Trial 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 -3.18 -3.05 -3.08 -3.04 -2.96

Competitive Comparison of Advanced Drainage Systems's Beneish M-Score

For the Building Products & Equipment subindustry, Advanced Drainage Systems'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.


Advanced Drainage Systems's Beneish M-Score Distribution in the Construction Industry

For the Construction industry and Industrials sector, Advanced Drainage Systems's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Advanced Drainage Systems's Beneish M-Score falls into.



Advanced Drainage Systems 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 Advanced Drainage Systems 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 * 1.0958+0.528 * 0.8818+0.404 * 0.9096+0.892 * 0.9063+0.115 * 1.1226
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0908+4.679 * -0.082594-0.327 * 0.9804
=-2.96

* 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 $241 Mil.
Revenue was 662.367 + 780.22 + 778.046 + 617.559 = $2,838 Mil.
Gross Profit was 259.849 + 302.677 + 331.46 + 222.421 = $1,116 Mil.
Total Current Assets was $1,238 Mil.
Total Assets was $3,162 Mil.
Property, Plant and Equipment(Net PPE) was $811 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General, & Admin. Expense(SGA) was $348 Mil.
Total Current Liabilities was $409 Mil.
Long-Term Debt & Capital Lease Obligation was $1,300 Mil.
Net Income was 105.639 + 135.802 + 173.652 + 85.893 = $501 Mil.
Non Operating Income was 2.26 + 7.383 + 16.853 + -11.986 = $15 Mil.
Cash Flow from Operations was 241.398 + 214.897 + 243.967 + 47.372 = $748 Mil.
Total Receivables was $242 Mil.
Revenue was 655.167 + 884.209 + 914.186 + 678.187 = $3,132 Mil.
Gross Profit was 223.917 + 319.963 + 352.107 + 190.229 = $1,086 Mil.
Total Current Assets was $1,157 Mil.
Total Assets was $3,006 Mil.
Property, Plant and Equipment(Net PPE) was $685 Mil.
Depreciation, Depletion and Amortization(DDA) was $145 Mil.
Selling, General, & Admin. Expense(SGA) was $352 Mil.
Total Current Liabilities was $370 Mil.
Long-Term Debt & Capital Lease Obligation was $1,287 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)
=(240.81 / 2838.192) / (242.485 / 3131.749)
=0.084846 / 0.077428
=1.0958

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)
=(1086.216 / 3131.749) / (1116.407 / 2838.192)
=0.34684 / 0.393351
=0.8818

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 - (1238.422 + 810.887) / 3161.959) / (1 - (1157.366 + 685.496) / 3005.658)
=0.351886 / 0.386869
=0.9096

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
=2838.192 / 3131.749
=0.9063

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))
=(145.467 / (145.467 + 685.496)) / (149.817 / (149.817 + 810.887))
=0.175058 / 0.155945
=1.1226

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)
=(347.934 / 2838.192) / (351.958 / 3131.749)
=0.12259 / 0.112384
=1.0908

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)
=((1299.689 + 409.125) / 3161.959) / ((1286.611 + 370.28) / 3005.658)
=0.540429 / 0.551257
=0.9804

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
=(500.986 - 14.51 - 747.634) / 3161.959
=-0.082594

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.

Advanced Drainage Systems has a M-score of -2.96 suggests that the company is unlikely to be a manipulator.


Advanced Drainage Systems Beneish M-Score Related Terms

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Advanced Drainage Systems (Advanced Drainage Systems) Business Description

Traded in Other Exchanges
Address
4640 Trueman Boulevard, Hilliard, OH, USA, 43026
Advanced Drainage Systems Inc is engaged in designing, manufacturing, and marketing thermoplastic corrugated pipe and related water management products in North and South America, and Europe. The company's operating segment includes Pipe; Infiltrator; International and Allied Products and Other. It generates maximum revenue from the Pipe segment. The company serves Agriculture; Aviation and Military; Mining; Residential; Transportation; Healthcare and Education and others.
Executives
Brian W. King officer: Executive Vice President C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLIARD OH 43026
Michael G. Huebert officer: Senior Vice President C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLIARD OH 43026
Tim A Makowski officer: SEE REMARKS (A) C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLIARD OH 43026
Robert M Klein officer: EVP, Sales C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLARD OH 43026
Anil Seetharam director 200 CLARENDON STREET, FLOOR 35, BOSTON MA 02116
Ross M Jones director ONE BOSTON PLACE, 33RD FL, BOSTON MA 02108
Alexander R Fischer director C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLARD OH 43026
Darin S. Harvey officer: EVP, Supply Chain & Logistics C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLIARD OH 43026
Craig J. Taylor officer: Executive Vice President C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BOULEVARD, HILLIARD OH 43026
Perez De La Mesa Manuel J director
Kevin C Talley officer: EVP and CAO C/O ADVANCED DRAINAGE SYSTEMS INC, 4640 TRUEMAN BOULEVARD, HILLIARD OH 43026
Kelly S. Gast director C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BLVD., HILLIARD OH 43026
Berkshire Partners Holdings Llc 10 percent owner 200 CLARENDON STREET, 35TH FLOOR, BOSTON MA 02116
Berkshire Fund Ix, L.p. 10 percent owner C/O NINTH BERKSHIRE ASSOCIATES LLC, 200 CLARENDON STREET, BOSTON MA 02116
Michael B. Coleman director C/O ADVANCED DRAINAGE SYSTEMS, INC., 4640 TRUEMAN BLVD., HILLIARD OH 43026