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GuruFocus has detected 4 Warning Signs with Stantec Inc $STN.
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Stantec Inc (NYSE:STN)
Beneish M-Score
-2.32 (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.

Stantec Inc has a M-score of -2.33 suggests that the company is not a manipulator.

STN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.39   Max: -0.08
Current: -2.32

-3.39
-0.08

During the past 13 years, the highest Beneish M-Score of Stantec Inc was -0.08. The lowest was -3.39. 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 Stantec Inc 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 * 0.9417+0.528 * 1.1171+0.404 * 0.9406+0.892 * 1.5419+0.115 * 0.8435
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9244+4.679 * -0.0552-0.327 * 1.176
=-2.33

* 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 $539 Mil.
Revenue was 652.72129678 + 930.198665567 + 959.195148001 + 602.858693966 = $3,145 Mil.
Gross Profit was 352.863225517 + 335.244770972 + 360.904028074 + 323.333333333 = $1,372 Mil.
Total Current Assets was $1,383 Mil.
Total Assets was $3,165 Mil.
Property, Plant and Equipment(Net PPE) was $159 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General & Admin. Expense(SGA) was $1,095 Mil.
Total Current Liabilities was $881 Mil.
Long-Term Debt was $588 Mil.
Net Income was -43.3300963621 + 22.106604693 + 37.5869697894 + 16.4192647743 = $33 Mil.
Non Operating Income was -12.7743333084 + 31.8442162081 + -12.9760451633 + -1.18504730883 = $5 Mil.
Cash Flow from Operations was -20.4362441174 + 153.836119649 + 45.1502898993 + 24.0088413215 = $203 Mil.
Accounts Receivable was $371 Mil.
Revenue was 475.312263723 + 518.09159192 + 565.964872607 + 480.321876264 = $2,040 Mil.
Gross Profit was 256.418418267 + 223.805877634 + 254.605005277 + 259.425798625 = $994 Mil.
Total Current Assets was $681 Mil.
Total Assets was $1,765 Mil.
Property, Plant and Equipment(Net PPE) was $122 Mil.
Depreciation, Depletion and Amortization(DDA) was $64 Mil.
Selling, General & Admin. Expense(SGA) was $768 Mil.
Total Current Liabilities was $427 Mil.
Long-Term Debt was $269 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)
=(538.888473893 / 3144.97380431) / (371.122032361 / 2039.69060451)
=0.17134911 / 0.18195016
=0.9417

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)
=(994.255099803 / 2039.69060451) / (1372.3453579 / 3144.97380431)
=0.48745388 / 0.43636146
=1.1171

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 - (1383.17920371 + 159.323224023) / 3164.62164787) / (1 - (680.827914713 + 122.250113413) / 1764.91758657)
=0.5125792 / 0.54497704
=0.9406

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
=3144.97380431 / 2039.69060451
=1.5419

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))
=(63.5819042692 / (63.5819042692 + 122.250113413)) / (108.738122116 / (108.738122116 + 159.323224023))
=0.3421472 / 0.40564641
=0.8435

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)
=(1095.20482234 / 3144.97380431) / (768.412986969 / 2039.69060451)
=0.34823973 / 0.37673017
=0.9244

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)
=((587.950250243 + 881.410323448) / 3164.62164787) / ((269.485105096 + 427.321185544) / 1764.91758657)
=0.46430845 / 0.39480953
=1.176

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
=(32.7827428946 - 4.90879042759 - 202.559006753) / 3164.62164787
=-0.0552

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.

Stantec Inc has a M-score of -2.33 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.

Stantec Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.20230.53881.18011.29391.10460.65780.94240.97541.19810.9751
GMI 1.00751.08040.92970.84891.23781.06930.94630.99610.95851.092
AQI 1.02860.98311.10991.00190.96691.00160.9261.01351.07141.1035
SGI 1.25911.42490.98040.92231.4151.19351.06621.05710.9331.3974
DEPI 1.28950.70781.00551.02360.48151.91821.0030.97410.83410.9547
SGAI 1.02340.91741.07791.17920.8060.93471.06271.00231.07360.954
LVGI 1.39511.19140.95461.04390.94510.96240.89351.02380.98921.2656
TATA -0.0314-0.1141-0.0548-0.0183-0.0745-0.0399-0.0843-0.0227-0.0235-0.0401
M-score -2.29-3.11-2.58-2.49-2.26-2.64-2.90-2.57-2.49-2.33

Stantec Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.97541.18041.17441.14631.19811.01741.27981.14710.97510.9417
GMI 0.99610.99550.96290.95070.95850.92730.95961.03691.0921.1171
AQI 1.01351.06041.0711.03831.07141.03671.08841.09371.10350.9406
SGI 1.05711.06911.00420.96080.9330.87960.97671.17921.39741.5419
DEPI 0.97410.89790.82450.79120.83410.93531.06531.02610.95470.8435
SGAI 1.00231.00391.05281.0651.07361.11941.09241.01460.9540.9244
LVGI 1.02381.00630.91770.95380.98921.04461.34621.36451.26561.176
TATA -0.02270.016-0.00840.0047-0.0235-0.0589-0.0287-0.02-0.0401-0.0552
M-score -2.57-2.17-2.35-2.39-2.49-2.91-2.48-2.34-2.33-2.33
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