AAR Corp Beneish M Score

AIR
 Stock
  

USD 42.00  0.16  0.38%   

This module uses fundamental data of AAR Corp to approximate the value of its Beneish M Score. AAR Corp M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please continue to AAR Corp Piotroski F Score and AAR Corp Altman Z Score analysis.
  
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AAR Corp Total Debt is relatively stable at the moment as compared to the past year. AAR Corp reported last year Total Debt of 174.24 Million. As of 07/04/2022, Debt Current is likely to grow to about 92.4 K, while Issuance Repayment of Debt Securities is likely to drop (434.1 M). AAR Corp Quick Ratio is relatively stable at the moment as compared to the past year. AAR Corp reported last year Quick Ratio of 0.72. As of 07/04/2022, Asset Turnover is likely to grow to 1.19, while PPandE Turnover is likely to drop 9.89.
At this time, it appears that AAR Corp is an unlikely manipulator. The earnings manipulation may begin if AAR Corp's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by AAR Corp executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of AAR Corp's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.31
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.1Focus
Asset Quality1.24Focus
Expense Coverage0.97Focus
Gross Margin Strengs1.0Focus
Accruals Factor0.97Focus
Depreciation Resistance0.9Focus
Net Sales Growth1.07Focus
Financial Leverage Condition1.21Focus

AAR Corp Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if AAR Corp's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
RevenuesB1.9 B
Notably Up
Increasing
Very volatile
Selling General and Administrative Expense217.8 M209.8 M
Sufficiently Up
Increasing
Slightly volatile
Net Cash Flow from Operations75.5 M94.7 M
Significantly Down
Decreasing
Stable
Depreciation Amortization and Accretion38.5 M32.7 M
Fairly Up
Decreasing
Slightly volatile
Total Assets1.5 B1.4 B
Notably Up
Decreasing
Slightly volatile
Investments23.6 M18.4 M
Significantly Up
Decreasing
Slightly volatile
Investments Non Current23.6 M18.4 M
Significantly Up
Decreasing
Slightly volatile
Property Plant and Equipment Net361.3 M342.1 M
Notably Up
Decreasing
Slightly volatile
Trade and Non Trade Receivables177.2 M150 M
Fairly Up
Decreasing
Slightly volatile
Total Liabilities624.4 M508.8 M
Fairly Up
Decreasing
Slightly volatile
Current Assets1.2 B1.1 B
Notably Up
Increasing
Stable
Assets Non Current599.4 M542.4 M
Significantly Up
Decreasing
Slightly volatile
Current Liabilities318 M303.1 M
Sufficiently Up
Decreasing
Slightly volatile
Liabilities Non Current306.4 M205.7 M
Way Up
Decreasing
Slightly volatile
Total Debt250.5 M174.2 M
Way Up
Decreasing
Slightly volatile
Debt Current92.4 K90 K
Fairly Up
Decreasing
Slightly volatile
Debt Non Current235.4 M174.2 M
Significantly Up
Decreasing
Slightly volatile
Operating Income72.9 M76.5 M
Sufficiently Down
Decreasing
Stable
Gross Margin0.190.19
Steady
Increasing
Slightly volatile

AAR Corp Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between AAR Corp's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards AAR Corp in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find AAR Corp's degree of accounting gimmicks and manipulations.

About AAR Corp Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

224.82 Million

Share
AAR Corp Operating Expenses is relatively stable at the moment as compared to the past year. AAR Corp reported last year Operating Expenses of 219.53 Million

AAR Corp Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as AAR Corp. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues1.75 B2.05 B2.07 B1.65 B1.9 B2.03 B
Total Assets1.52 B1.52 B2.08 B1.54 B1.39 B1.47 B
Current Assets942.7 M952.5 M1.44 B937 M1.08 B1.15 B
Assets Non Current582 M564.7 M640.3 M602.7 M542.43 M599.43 M
Total Liabilities588.4 M611.3 M1.18 B565.3 M508.77 M624.44 M
Current Liabilities333.3 M357.5 M383.1 M336.8 M303.12 M318 M
Total Debt177.2 M141.7 M670.9 M193.6 M174.24 M250.52 M
Debt Non Current177.2 M141.7 M670.9 M193.6 M174.24 M235.36 M
Operating Income85.5 M98.6 M43.2 M85 M76.5 M72.93 M

About AAR Corp Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze AAR Corp's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of AAR Corp using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of AAR Corp based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois. AAR Corp operates under Aerospace Defense classification in the United States and is traded on New York Stock Exchange. It employs 4700 people.

AAR Corp Investors Sentiment

The influence of AAR Corp's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in AAR Corp. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

AAR Corp Implied Volatility

    
  30.67  
AAR Corp's implied volatility exposes the market's sentiment of AAR Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if AAR Corp's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that AAR Corp stock will not fluctuate a lot when AAR Corp's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards AAR Corp in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, AAR Corp's short interest history, or implied volatility extrapolated from AAR Corp options trading.

Current Sentiment - AIR

AAR Corp Investor Sentiment

Greater number of Macroaxis users are presently bullish on AAR Corp. What is your sentiment towards investing in AAR Corp? Are you bullish or bearish?
Bullish
Bearish
98% Bullish
2% Bearish

Pair Trading with AAR Corp

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if AAR Corp position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AAR Corp will appreciate offsetting losses from the drop in the long position's value.

AAR Corp Pair Correlation

Correlation Analysis For Direct Indexing and Tax-loss Harvesting

The ability to find closely correlated positions to AAR Corp could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace AAR Corp when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back AAR Corp - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling AAR Corp to buy it.
The correlation of AAR Corp is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as AAR Corp moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if AAR Corp moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for AAR Corp can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Please continue to AAR Corp Piotroski F Score and AAR Corp Altman Z Score analysis. Note that the AAR Corp information on this page should be used as a complementary analysis to other AAR Corp's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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Is AAR Corp's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of AAR Corp. If investors know AAR Corp will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about AAR Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.2
Market Capitalization
1.5 B
Quarterly Revenue Growth YOY
0.1
Return On Assets
0.0379
Return On Equity
0.0711
The market value of AAR Corp is measured differently than its book value, which is the value of AAR Corp that is recorded on the company's balance sheet. Investors also form their own opinion of AAR Corp's value that differs from its market value or its book value, called intrinsic value, which is AAR Corp's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because AAR Corp's market value can be influenced by many factors that don't directly affect AAR Corp's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between AAR Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine AAR Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, AAR Corp's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.