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Carnival Corp (NYSE:CCL)
Beneish M-Score
-2.55 (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 -2.55 suggests that the company is not a manipulator.

CCL' s 10-Year Beneish M-Score Range
Min: -3.24   Max: 10.14
Current: -2.55

-3.24
10.14

During the past 13 years, the highest Beneish M-Score of Carnival Corp was 10.14. The lowest was -3.24. 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 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 * 1.304+0.528 * 0.8553+0.404 * 0.9652+0.892 * 1.0119+0.115 * 0.9597
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.014+4.679 * -0.0566-0.327 * 0.9843
=-2.55

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $380 Mil.
Revenue was 3590 + 3531 + 3719 + 4947 = $15,787 Mil.
Gross Profit was 1186 + 1196 + 1222 + 2193 = $5,797 Mil.
Total Current Assets was $1,479 Mil.
Total Assets was $38,611 Mil.
Property, Plant and Equipment(Net PPE) was $32,179 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,627 Mil.
Selling, General & Admin. Expense(SGA) was $2,048 Mil.
Total Current Liabilities was $7,683 Mil.
Long-Term Debt was $6,648 Mil.
Net Income was 222 + 49 + -102 + 1247 = $1,416 Mil.
Non Operating Income was -8 + -159 + -289 + 16 = $-440 Mil.
Cash Flow from Operations was 1515 + 771 + 637 + 1120 = $4,043 Mil.
Accounts Receivable was $288 Mil.
Revenue was 3633 + 3585 + 3658 + 4726 = $15,602 Mil.
Gross Profit was 1061 + 993 + 1037 + 1809 = $4,900 Mil.
Total Current Assets was $1,625 Mil.
Total Assets was $40,526 Mil.
Property, Plant and Equipment(Net PPE) was $33,515 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,623 Mil.
Selling, General & Admin. Expense(SGA) was $1,996 Mil.
Total Current Liabilities was $7,401 Mil.
Long-Term Debt was $7,880 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)
=(380 / 15787) / (288 / 15602)
=0.02407044 / 0.01845917
=1.304

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)
=(1196 / 15602) / (1186 / 15787)
=0.3140623 / 0.36720086
=0.8553

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 - (1479 + 32179) / 38611) / (1 - (1625 + 33515) / 40526)
=0.12827951 / 0.13290233
=0.9652

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
=15787 / 15602
=1.0119

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))
=(1623 / (1623 + 33515)) / (1627 / (1627 + 32179))
=0.04618931 / 0.04812755
=0.9597

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)
=(2048 / 15787) / (1996 / 15602)
=0.12972699 / 0.12793232
=1.014

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)
=((6648 + 7683) / 38611) / ((7880 + 7401) / 40526)
=0.37116366 / 0.37706657
=0.9843

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
=(1416 - -440 - 4043) / 38611
=-0.0566

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 -2.55 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.

Carnival Corp Annual Data

Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14
DSRI 0.92180.61021.41450.85310.94230.63730.97161.0542.89720.6017
GMI 0.99881.03081.02811.08331.01981.01021.06831.05711.05260.906
AQI 0.94250.96240.97570.97320.93310.95220.96880.97390.98761.0133
SGI 1.14051.06721.10091.12380.9191.0751.09150.9741.00481.0277
DEPI 0.92431.00471.01830.88041.07380.96010.96460.99930.98530.9689
SGAI 0.91091.01570.99130.9181.06210.94430.97461.02851.08721.0637
LVGI 0.93931.00091.03081.01910.94350.96170.99791.0110.99690.9783
TATA -0.0404-0.0441-0.0486-0.0326-0.0426-0.049-0.0483-0.0431-0.0445-0.0487
M-score -2.61-2.99-2.24-2.63-2.80-2.97-2.63-2.64-0.93-3.10

Carnival Corp Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.44981.47691.46282.89720.64270.69381.04620.60171.24441.304
GMI 1.00031.00761.06211.05261.07361.0590.93910.9080.87280.8553
AQI 0.97750.98970.98480.98760.99021.02691.02161.01330.9770.9652
SGI 0.96470.96590.99191.00481.00361.01751.02911.02771.02471.0119
DEPI 1.0020.9930.980.98530.99850.98910.98650.96890.96440.9597
SGAI 1.0621.07711.07411.08781.09951.10391.0961.06261.03621.014
LVGI 1.00021.00281.03930.99690.98770.94790.92680.97831.0080.9843
TATA -0.0397-0.0413-0.0437-0.0445-0.0483-0.0486-0.0483-0.0491-0.0522-0.0566
M-score -2.30-2.28-2.27-0.93-3.01-2.93-2.66-3.10-2.57-2.55
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