From the original Beneish paper

Asset quality in a given year is the ratio of non-current assets other than property plant and equipment (PPE) to total assets and measures the proportion of total assets for which future benefits are potentially less certain. AQI is the ratio of asset quality in year t, relative to asset quality in year t-1. AQI is an aggregate measure of the change in the asset realization risk analysis suggested by Siegel (1991). If AQI is greater than 1 it indicates that the firm has potentially increased its involvement in cost deferral. I thus expect a positive relation between AQI and the probability of earnings manipulation. An increase in asset realization risk indicates an increased propensity to capitalize and thus defer costs.

Beneish Formula

(1 - ((Current Assets{t} + Net Plant{t}) / Total Assets{t})) /
(1 - ((Current Assets{t-1} + Net Plant{t-1}) / Total Assets{t-1}))

If meaningful data is not available, set score equal to neutral (1.00)

Our Formula

ISNA((1-((AstCurQ+ NetPlantQ)/ AstTotQ)) /
(1-((AstCurPYQ+ NetPlantPYQ)/ AstTotPYQ)),1))

NOTE: If AstCurQ during preliminary reporting is N/A , the whole formula excludes the latest period

Related Factors:

BeneishMScore MScoreAQI MScoreDEPAMI MScoreDEPI MScoreDSRI MScoreGMI MScoreLVGI MScoreSGAI MScoreSGAI MScoreTATA