Switch to:
AK Steel Holding Corporation (NYSE:AKS)
Beneish M-Score
-2.33 (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.

AK Steel Holding Corporation has a M-score of -2.33 suggests that the company is not a manipulator.

AKS' s 10-Year Beneish M-Score Range
Min: -3.86   Max: -0.9
Current: -2.33

-3.86
-0.9

During the past 13 years, the highest Beneish M-Score of AK Steel Holding Corporation was -0.90. The lowest was -3.86. And the median was -2.46.


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 AK Steel Holding Corporation 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 * 1.1805+0.528 * 0.8008+0.404 * 1.0929+0.892 * 0.9388+0.115 * 0.9397
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5975+4.679 * 0.018-0.327 * 1.138
=-2.33

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $525 Mil.
Revenue was 1464.8 + 1331.3 + 1404.5 + 1369.8 = $5,570 Mil.
Gross Profit was 140.9 + 108.9 + 95.3 + 117.5 = $463 Mil.
Total Current Assets was $1,273 Mil.
Total Assets was $3,606 Mil.
Property, Plant and Equipment(Net PPE) was $1,880 Mil.
Depreciation, Depletion and Amortization(DDA) was $209 Mil.
Selling, General & Admin. Expense(SGA) was $205 Mil.
Total Current Liabilities was $831 Mil.
Long-Term Debt was $1,506 Mil.
Net Income was 35.2 + -31.7 + -40.4 + -9.9 = $-47 Mil.
Non Operating Income was -2.9 + -2.8 + 2.5 + 1.8 = $-1 Mil.
Cash Flow from Operations was 113.5 + -119.2 + -97.5 + -7 = $-110 Mil.
Accounts Receivable was $474 Mil.
Revenue was 1423.1 + 1463.5 + 1538.4 + 1508.7 = $5,934 Mil.
Gross Profit was 70.4 + 78.5 + 146 + 99.7 = $395 Mil.
Total Current Assets was $1,443 Mil.
Total Assets was $3,903 Mil.
Property, Plant and Equipment(Net PPE) was $2,012 Mil.
Depreciation, Depletion and Amortization(DDA) was $209 Mil.
Selling, General & Admin. Expense(SGA) was $366 Mil.
Total Current Liabilities was $812 Mil.
Long-Term Debt was $1,411 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)
=(525.2 / 5570.4) / (473.9 / 5933.7)
=0.09428407 / 0.07986585
=1.1805

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)
=(108.9 / 5933.7) / (140.9 / 5570.4)
=0.06650151 / 0.0830461
=0.8008

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 - (1273.2 + 1880.1) / 3605.7) / (1 - (1442.7 + 2012.3) / 3903.1)
=0.12546801 / 0.11480618
=1.0929

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
=5570.4 / 5933.7
=0.9388

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))
=(209 / (209 + 2012.3)) / (209.2 / (209.2 + 1880.1))
=0.09408905 / 0.10012923
=0.9397

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)
=(205.3 / 5570.4) / (366 / 5933.7)
=0.03685552 / 0.06168158
=0.5975

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)
=((1506.2 + 831.4) / 3605.7) / ((1411.2 + 812.4) / 3903.1)
=0.64830685 / 0.56970101
=1.138

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
=(-46.8 - -1.4 - -110.2) / 3605.7
=0.018

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.

AK Steel Holding Corporation 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 own currency.

AK Steel Holding Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.22730.83241.13750.83950.63771.84790.71211.07830.91561.1805
GMI 0.30111.10421.13450.6561.02611.87961.47340.81711.00250.8008
AQI 0.76310.95720.84570.89410.97331.18521.14681.25950.50821.0929
SGI 1.29091.08241.07471.15391.09160.53331.4641.08370.91740.9388
DEPI 1.01351.03520.95470.94010.98610.95131.03821.12550.89890.9397
SGAI 0.65640.93280.92740.93260.91651.6160.72312.1870.82510.5975
LVGI 0.86561.08021.00860.84320.93341.0791.13321.12511.41861.138
TATA 0.0657-0.02940.0131-0.0536-0.0172-0.03330.00270.0068-0.19540.018
M-score -2.06-2.67-2.21-2.91-2.77-1.87-2.00-2.52-3.86-2.33

AK Steel Holding Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.91191.07830.96590.87191.01040.91560.88341.02111.0331.1805
GMI 1.51580.81710.68340.63230.91561.00250.92031.03580.89430.8008
AQI 1.09051.25951.29310.69080.71870.50820.51331.1051.0111.0929
SGI 1.07661.08371.0410.96890.94810.91740.90610.92170.91840.9388
DEPI 1.0011.12551.01920.95140.99480.89890.93930.95760.9230.9397
SGAI 0.87452.26752.36812.53182.70270.79580.7940.78240.77470.5975
LVGI 1.17781.12511.13181.33041.36621.41861.31361.07781.09361.138
TATA 0.05550.0068-0.0075-0.2027-0.1978-0.1954-0.2316-0.0771-0.05620.018
M-score -1.96-2.54-2.83-4.27-4.01-3.86-4.07-2.82-2.84-2.33
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide