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.
AAR Beneish M-Score Chart
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AAR Annual Data
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Trend |
May14 |
May15 |
May16 |
May17 |
May18 |
May19 |
May20 |
May21 |
May22 |
May23 |
| Beneish M-Score |
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-2.40 |
-2.62 |
-2.38 |
-2.31 |
-2.15 |
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AAR Quarterly Data
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May19 |
Aug19 |
Nov19 |
Feb20 |
May20 |
Aug20 |
Nov20 |
Feb21 |
May21 |
Aug21 |
Nov21 |
Feb22 |
May22 |
Aug22 |
Nov22 |
Feb23 |
May23 |
Aug23 |
Nov23 |
Feb24 |
| Beneish M-Score |
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-2.16 |
-2.15 |
-2.03 |
-2.25 |
-2.41 |
Competitive Comparison of AAR's Beneish M-Score
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's Beneish M-Score Distribution in the Aerospace & Defense Industry
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 * 0.9007 | + | 0.528 * 0.9629 | + | 0.404 * 1.1036 | + | 0.892 * 1.1581 | + | 0.115 * 0.9889 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.1495 | + | 4.679 * 0.01375 | - | 0.327 * 1.1282 |
| = | -2.41 |
* 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 (Feb24) TTM: | Last Year (Feb23) TTM: |
Total Receivables was $344 Mil.
Revenue was 567.3 + 545.4 + 549.7 + 553.3 = $2,216 Mil.
Gross Profit was 110.3 + 103.4 + 101.3 + 108.1 = $423 Mil.
Total Current Assets was $1,241 Mil.
Total Assets was $2,022 Mil.
Property, Plant and Equipment(Net PPE) was $224 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General, & Admin. Expense(SGA) was $288 Mil.
Total Current Liabilities was $428 Mil.
Long-Term Debt & Capital Lease Obligation was $348 Mil.
Net Income was 14 + 23.8 + -0.6 + 23.2 = $60 Mil.
Non Operating Income was -1.4 + -0.4 + -28.3 + -1.6 = $-32 Mil.
Cash Flow from Operations was 20.4 + 17.4 + -18.7 + 45.2 = $64 Mil.
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Total Receivables was $329 Mil.
Revenue was 521.1 + 469.8 + 446.3 + 476.1 = $1,913 Mil.
Gross Profit was 94.3 + 85.8 + 81.9 + 89.8 = $352 Mil.
Total Current Assets was $1,068 Mil.
Total Assets was $1,673 Mil.
Property, Plant and Equipment(Net PPE) was $187 Mil.
Depreciation, Depletion and Amortization(DDA) was $28 Mil.
Selling, General, & Admin. Expense(SGA) was $217 Mil.
Total Current Liabilities was $332 Mil.
Long-Term Debt & Capital Lease Obligation was $238 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) |
| = | (343.6 / 2215.7) | / | (329.4 / 1913.3) |
| = | 0.155075 | / | 0.172163 |
| | = | 0.9007 |
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) |
| = | (351.8 / 1913.3) | / | (423.1 / 2215.7) |
| = | 0.183871 | / | 0.190955 |
| | = | 0.9629 |
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 - (1240.7 + 223.6) / 2021.8) | / | (1 - (1067.8 + 187.4) / 1673.3) |
| = | 0.275744 | / | 0.249866 |
| | = | 1.1036 |
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 |
| = | 2215.7 | / | 1913.3 |
| | = | 1.1581 |
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)) |
| = | (27.8 / (27.8 + 187.4)) | / | (33.6 / (33.6 + 223.6)) |
| = | 0.129182 | / | 0.130638 |
| | = | 0.9889 |
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) |
| = | (288.2 / 2215.7) | / | (216.5 / 1913.3) |
| = | 0.130072 | / | 0.113155 |
| | = | 1.1495 |
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) |
| = | ((347.7 + 428.2) / 2021.8) | / | ((237.6 + 331.6) / 1673.3) |
| = | 0.383767 | / | 0.340166 |
| | = | 1.1282 |
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 |
| = | (60.4 - -31.7 | - | 64.3) | / | 2021.8 |
| | = | 0.01375 |
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 -2.41 suggests that the company is unlikely to be a manipulator.
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