Switch to:
CF Industries Holdings Inc (NYSE:CF)
Beneish M-Score
-2.84 (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.

CF Industries Holdings Inc has a M-score of -2.84 suggests that the company is not a manipulator.

CF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -0.02
Current: -2.84

-3.27
-0.02

During the past 13 years, the highest Beneish M-Score of CF Industries Holdings Inc was -0.02. The lowest was -3.27. 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 CF Industries Holdings Inc 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 * 0.9212+0.528 * 1.4877+0.404 * 0.7739+0.892 * 0.892+0.115 * 0.8982
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.3054+4.679 * -0.0415-0.327 * 0.7801
=-2.84

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $207 Mil.
Revenue was 680 + 1134 + 1004 + 1115.3 = $3,933 Mil.
Gross Profit was 2 + 527 + 217 + 280.1 = $1,026 Mil.
Total Current Assets was $2,931 Mil.
Total Assets was $15,632 Mil.
Property, Plant and Equipment(Net PPE) was $9,725 Mil.
Depreciation, Depletion and Amortization(DDA) was $607 Mil.
Selling, General & Admin. Expense(SGA) was $390 Mil.
Total Current Liabilities was $966 Mil.
Long-Term Debt was $5,540 Mil.
Net Income was -30 + 47 + 26 + 26.9 = $70 Mil.
Non Operating Income was -1 + 0 + -2 + 1.1 = $-2 Mil.
Cash Flow from Operations was 145 + 100 + 346 + 129.7 = $721 Mil.
Accounts Receivable was $252 Mil.
Revenue was 928 + 1311 + 954 + 1216.5 = $4,410 Mil.
Gross Profit was 165 + 686 + 416 + 444.3 = $1,711 Mil.
Total Current Assets was $1,764 Mil.
Total Assets was $12,870 Mil.
Property, Plant and Equipment(Net PPE) was $7,940 Mil.
Depreciation, Depletion and Amortization(DDA) was $442 Mil.
Selling, General & Admin. Expense(SGA) was $190 Mil.
Total Current Liabilities was $1,274 Mil.
Long-Term Debt was $5,593 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)
=(207 / 3933.3) / (251.9 / 4409.5)
=0.05262756 / 0.05712666
=0.9212

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)
=(1711.3 / 4409.5) / (1026.1 / 3933.3)
=0.38809389 / 0.26087509
=1.4877

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 - (2931 + 9725) / 15632) / (1 - (1764.2 + 7939.6) / 12869.8)
=0.19037871 / 0.24600227
=0.7739

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
=3933.3 / 4409.5
=0.892

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))
=(442 / (442 + 7939.6)) / (606.6 / (606.6 + 9725))
=0.05273456 / 0.05871307
=0.8982

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)
=(389.7 / 3933.3) / (189.5 / 4409.5)
=0.09907711 / 0.04297539
=2.3054

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)
=((5540 + 966) / 15632) / ((5592.6 + 1273.6) / 12869.8)
=0.41619754 / 0.53351256
=0.7801

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
=(69.9 - -1.9 - 720.7) / 15632
=-0.0415

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.

CF Industries Holdings Inc has a M-score of -2.84 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.

CF Industries Holdings Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 2.08820.96280.82791.43720.93880.72640.7981.17670.95261.5829
GMI 1.46810.29790.77940.9691.08180.62650.9311.1081.22771.0442
AQI 2.62051.16752.24541.36762.37940.96150.88761.08630.76890.8371
SGI 1.0331.3561.42240.66521.52011.53791.0010.89690.86640.9083
DEPI 0.97971.14620.90291.17091.23520.91171.03161.06781.37211.2471
SGAI 1.03340.66460.69891.39051.10970.79671.16651.21921.05621.6431
LVGI 0.98561.13711.08730.56681.70540.89120.84981.46591.34651.0752
TATA -0.1104-0.13140.019-0.1319-0.0978-0.0602-0.04880.0049-0.0015-0.0394
M-score -1.07-3.08-1.77-2.77-2.15-2.69-2.95-2.48-2.70-2.36

CF Industries Holdings Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.02840.97390.95260.89450.86181.7671.58291.64211.29130.9212
GMI 1.22891.15471.22771.13110.95411.02371.04421.24071.47541.4877
AQI 0.8670.86820.76891.05250.9880.87690.83710.69740.65560.7739
SGI 0.85340.8620.86640.8660.87560.90860.90830.95480.94970.892
DEPI 1.15231.22521.37211.3711.34521.37661.24711.19051.01120.8982
SGAI 1.12151.18311.05621.06141.07221.26861.64311.71333.00752.3054
LVGI 1.31091.30261.34651.06381.03431.10271.07520.85050.8240.7801
TATA 0.01120.0224-0.0015-0.0241-0.0367-0.0307-0.0393-0.0332-0.0606-0.0415
M-score -2.57-2.60-2.70-2.71-2.90-2.07-2.36-2.13-2.71-2.84
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)
FEEDBACK