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GuruFocus has detected 4 Warning Signs with Carnival Corp $CCL.
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Carnival Corp (NYSE:CCL)
Beneish M-Score
-2.85 (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.

Carnival Corp has a M-score of -2.85 suggests that the company is not a manipulator.

CCL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.24   Max: 6.98
Current: -2.85

-3.24
6.98

During the past 13 years, the highest Beneish M-Score of Carnival Corp was 6.98. The lowest was -3.24. And the median was -2.60.


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 Carnival Corp 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 * 0.9431+0.528 * 0.9331+0.404 * 0.9773+0.892 * 1.0428+0.115 * 0.9558
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0188+4.679 * -0.0598-0.327 * 1.0821
=-2.85

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Nov16) TTM:Last Year (Nov15) TTM:
Accounts Receivable was $298 Mil.
Revenue was 3935 + 5097 + 3705 + 3651 = $16,388 Mil.
Gross Profit was 1616 + 2534 + 1447 + 1408 = $7,005 Mil.
Total Current Assets was $1,689 Mil.
Total Assets was $38,936 Mil.
Property, Plant and Equipment(Net PPE) was $32,429 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,738 Mil.
Selling, General & Admin. Expense(SGA) was $2,196 Mil.
Total Current Liabilities was $7,072 Mil.
Long-Term Debt was $8,357 Mil.
Net Income was 608 + 1424 + 605 + 142 = $2,779 Mil.
Non Operating Income was 70 + -38 + 184 + -241 = $-25 Mil.
Cash Flow from Operations was 1024 + 1429 + 1883 + 798 = $5,134 Mil.
Accounts Receivable was $303 Mil.
Revenue was 3711 + 4883 + 3590 + 3531 = $15,715 Mil.
Gross Profit was 1493 + 2393 + 1186 + 1196 = $6,268 Mil.
Total Current Assets was $2,451 Mil.
Total Assets was $39,237 Mil.
Property, Plant and Equipment(Net PPE) was $31,818 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,626 Mil.
Selling, General & Admin. Expense(SGA) was $2,067 Mil.
Total Current Liabilities was $6,956 Mil.
Long-Term Debt was $7,413 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)
=(298 / 16388) / (303 / 15715)
=0.01818404 / 0.01928094
=0.9431

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)
=(6268 / 15715) / (7005 / 16388)
=0.3988546 / 0.42744691
=0.9331

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 - (1689 + 32429) / 38936) / (1 - (2451 + 31818) / 39237)
=0.12374152 / 0.12661518
=0.9773

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
=16388 / 15715
=1.0428

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))
=(1626 / (1626 + 31818)) / (1738 / (1738 + 32429))
=0.04861859 / 0.0508678
=0.9558

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)
=(2196 / 16388) / (2067 / 15715)
=0.13400049 / 0.13153038
=1.0188

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)
=((8357 + 7072) / 38936) / ((7413 + 6956) / 39237)
=0.39626567 / 0.36621046
=1.0821

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
=(2779 - -25 - 5134) / 38936
=-0.0598

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.

Carnival Corp has a M-score of -2.85 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 local exchange's currency.

Carnival Corp Annual Data

Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14Nov15Nov16
DSRI 1.41450.85310.94230.63731.08242.5581.07160.60170.63020.943
GMI 1.02811.08331.01981.01021.06831.05711.05720.9050.86240.9329
AQI 0.97570.97320.93310.95220.96880.97390.98760.99330.97150.9773
SGI 1.10091.12380.9191.0751.09150.9741.00481.02770.98931.043
DEPI 1.01830.88041.07380.96010.96460.99930.98410.97020.97720.9558
SGAI 0.99130.9181.06210.94430.97461.02851.08721.06371.01721.0191
LVGI 1.03081.01910.94350.96170.99791.0110.99690.98041.01141.0821
TATA -0.0486-0.0326-0.0426-0.049-0.0483-0.0431-0.0451-0.0494-0.0566-0.0598
M-score -2.24-2.63-2.80-2.97-2.52-1.26-2.61-3.11-3.19-2.85

Carnival Corp Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
DSRI 1.04620.60171.24441.3040.95160.63021.28531.15130.91030.9431
GMI 0.94390.90520.87010.85270.87120.86210.87450.86780.89570.9331
AQI 1.02160.99330.9770.96520.95850.97150.98980.97940.97960.9773
SGI 1.02911.02771.02471.01190.99370.98941.00031.01031.0281.0428
DEPI 0.98420.97020.96440.95970.98670.97720.97331.00170.95720.9558
SGAI 1.0961.06261.03621.0141.01281.01761.01331.02941.03151.0188
LVGI 0.92680.98041.0080.98430.98171.01141.02791.08331.13911.0821
TATA -0.049-0.0494-0.0524-0.0568-0.0555-0.0566-0.0539-0.0565-0.06-0.0598
M-score -2.66-3.11-2.57-2.55-2.87-3.19-2.55-2.71-2.94-2.85
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