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AZEK (The AZEK Co) Beneish M-Score : -2.99 (As of Oct. 31, 2024)


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What is The AZEK Co 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 -2.99 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

AZEK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.62   Med: -2.87   Max: -2.05
Current: -2.99

During the past 6 years, the highest Beneish M-Score of The AZEK Co was -2.05. The lowest was -3.62. And the median was -2.87.


The AZEK Co Beneish M-Score Historical Data

The historical data trend for The AZEK Co'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.

The AZEK Co Beneish M-Score Chart

The AZEK Co Annual Data
Trend Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Beneish M-Score
Get a 7-Day Free Trial - -2.57 -2.52 -2.39 -3.48

The AZEK Co Quarterly Data
Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24
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 -3.22 -3.48 -3.62 -3.01 -2.99

Competitive Comparison of The AZEK Co's Beneish M-Score

For the Building Products & Equipment subindustry, The AZEK Co'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.


The AZEK Co's Beneish M-Score Distribution in the Construction Industry

For the Construction industry and Industrials sector, The AZEK Co's Beneish M-Score distribution charts can be found below:

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



The AZEK Co 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 The AZEK Co 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 * 0.8048+0.528 * 0.7157+0.404 * 1.0235+0.892 * 1.1523+0.115 * 0.8279
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0049+4.679 * -0.069531-0.327 * 0.9501
=-2.99

* 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 (Jun24) TTM:Last Year (Jun23) TTM:
Total Receivables was $68 Mil.
Revenue was 434.369 + 418.408 + 240.444 + 388.812 = $1,482 Mil.
Gross Profit was 164.324 + 157.073 + 90.65 + 145.293 = $557 Mil.
Total Current Assets was $657 Mil.
Total Assets was $2,341 Mil.
Property, Plant and Equipment(Net PPE) was $459 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General, & Admin. Expense(SGA) was $334 Mil.
Total Current Liabilities was $214 Mil.
Long-Term Debt & Capital Lease Obligation was $577 Mil.
Net Income was 50.11 + 49.758 + 25.148 + 39.231 = $164 Mil.
Non Operating Income was 0.139 + -0.128 + 36.33 + 0.029 = $36 Mil.
Cash Flow from Operations was 195.075 + -14.806 + -16.288 + 126.649 = $291 Mil.
Total Receivables was $73 Mil.
Revenue was 387.553 + 377.692 + 216.259 + 304.632 = $1,286 Mil.
Gross Profit was 131.914 + 110.874 + 42.187 + 61.209 = $346 Mil.
Total Current Assets was $570 Mil.
Total Assets was $2,359 Mil.
Property, Plant and Equipment(Net PPE) was $583 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General, & Admin. Expense(SGA) was $288 Mil.
Total Current Liabilities was $167 Mil.
Long-Term Debt & Capital Lease Obligation was $672 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)
=(67.619 / 1482.033) / (72.918 / 1286.136)
=0.045626 / 0.056695
=0.8048

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)
=(346.184 / 1286.136) / (557.34 / 1482.033)
=0.269166 / 0.376065
=0.7157

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 - (656.693 + 459.369) / 2340.728) / (1 - (569.647 + 583.363) / 2358.866)
=0.523199 / 0.511202
=1.0235

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
=1482.033 / 1286.136
=1.1523

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))
=(130.342 / (130.342 + 583.363)) / (130.016 / (130.016 + 459.369))
=0.182627 / 0.220596
=0.8279

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)
=(333.993 / 1482.033) / (288.437 / 1286.136)
=0.225361 / 0.224266
=1.0049

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)
=((576.804 + 214.047) / 2340.728) / ((671.745 + 167.092) / 2358.866)
=0.337865 / 0.35561
=0.9501

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
=(164.247 - 36.37 - 290.63) / 2340.728
=-0.069531

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.

The AZEK Co has a M-score of -2.99 suggests that the company is unlikely to be a manipulator.


The AZEK Co Beneish M-Score Related Terms

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The AZEK Co Business Description

Traded in Other Exchanges
N/A
Address
1330 W Fulton Street, Suite 350, Chicago, IL, USA, 60607
The AZEK Co Inc is a designer and manufacturer of beautiful, low maintenance and environmentally sustainable products focused on the fast-growing Outdoor Living market. Its portfolio of products includes decks, rail, trim, outdoor furniture among others. The company operates in two segments which are Residential and Commercial. It generates maximum revenue from the Residential segment. The company's brand includes TimberTech; AZEK; Versatex, Ultralox, StruXure, and Intex.
Executives
Jonathan Skelly officer: See Remarks 1330 W. FULTON MARKET STREET, SUITE 350, CHICAGO IL 60607
Jesse G Singh director, officer: CEO and President 16430 N. SCOTTSDALE ROAD, SUITE 400, SCOTTSDALE AZ 85254
Pamela J Edwards director 104 COLEMAN BOULEVARD, SAVANNAH GA 31408
Amanda Cimaglia officer: VP of ESG and IR 1330 WEST FULTON MARKET STREET, SUITE 350, CHICAGO IL 60607
Michelle A Kasson officer: Chief Information Officer 1330 W. FULTON MARKET STREET, SUITE 350, CHICAGO IL 60607
Samara Toole officer: Chief Marketing Officer 1330 W FULTON STREET, SUITE 350, CHICAGO IL 60607
Randy Herth officer: Chief Accounting Officer 1330 W. FULTON ST., SUITE 350, CHICAGO IL 60607
Harmit J Singh director 71 SOUTH WACKER DRIVE, 12TH FLOOR, CHICAGO IL 60606
Ares Corporate Opportunities Fund Iv, L.p. director, 10 percent owner 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067
Ontario Teachers Pension Plan Board director, 10 percent owner 5650 YONGE STREET, TORONTO A6 M2M 4H5
Christopher Latkovic officer: SVP, Operations 1330 W. FULTON STREET, SUITE 350, CHICAGO IL 60607
Gary E Hendrickson director 1101 THIRD STREET SOUTH, MINNEAPOLIS MN 55415
Vernon J Nagel director 1330 W. FULTON STREET, SUITE 350, CHICAGO IL 60607
Sandra Lamartine officer: CHRO 1330 WEST FULTON MARKET STREET, SUITE 350, CHICAGO IL 60607
Peter G Clifford officer: CFO 40 TOURNAMENT DRIVE SOUTH, HAWTHORN WOODS IL 60047