Switch to:
CF Industries Holdings Inc (NYSE:CF)
Beneish M-Score
-2.72 (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 -2.72 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: -2.72

-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 -2.61.


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 * 1.2913+0.528 * 1.475+0.404 * 0.6556+0.892 * 0.9496+0.115 * 1.0112
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 3.0075+4.679 * -0.0608-0.327 * 0.824
=-2.72

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $239 Mil.
Revenue was 1134 + 1004 + 1115.8 + 927.4 = $4,181 Mil.
Gross Profit was 527 + 217 + 280.4 + 165 = $1,189 Mil.
Total Current Assets was $3,374 Mil.
Total Assets was $15,762 Mil.
Property, Plant and Equipment(Net PPE) was $9,413 Mil.
Depreciation, Depletion and Amortization(DDA) was $588 Mil.
Selling, General & Admin. Expense(SGA) was $425 Mil.
Total Current Liabilities was $773 Mil.
Long-Term Debt was $5,540 Mil.
Net Income was 47 + 26 + 26.5 + 90.9 = $190 Mil.
Non Operating Income was 0 + -2 + 13.1 + -12.7 = $-2 Mil.
Cash Flow from Operations was 100 + 346 + 132.2 + 572.5 = $1,151 Mil.
Accounts Receivable was $195 Mil.
Revenue was 1311 + 954 + 1216.5 + 921.4 = $4,403 Mil.
Gross Profit was 686 + 416 + 444.3 + 301.1 = $1,847 Mil.
Total Current Assets was $1,366 Mil.
Total Assets was $10,998 Mil.
Property, Plant and Equipment(Net PPE) was $6,466 Mil.
Depreciation, Depletion and Amortization(DDA) was $408 Mil.
Selling, General & Admin. Expense(SGA) was $149 Mil.
Total Current Liabilities was $754 Mil.
Long-Term Debt was $4,593 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)
=(239 / 4181.2) / (194.9 / 4402.9)
=0.05716062 / 0.04426628
=1.2913

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)
=(1847.4 / 4402.9) / (1189.4 / 4181.2)
=0.41958709 / 0.28446379
=1.475

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 - (3374 + 9413) / 15762) / (1 - (1366.4 + 6465.6) / 10998.4)
=0.18874508 / 0.28789642
=0.6556

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
=4181.2 / 4402.9
=0.9496

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))
=(408.4 / (408.4 + 6465.6)) / (587.6 / (587.6 + 9413))
=0.05941228 / 0.05875647
=1.0112

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)
=(424.7 / 4181.2) / (148.7 / 4402.9)
=0.10157371 / 0.03377319
=3.0075

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 + 773) / 15762) / ((4592.6 + 753.5) / 10998.4)
=0.40052024 / 0.48607979
=0.824

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
=(190.4 - -1.6 - 1150.7) / 15762
=-0.0608

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 -2.72 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.

CF Industries Holdings Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 2.08820.96280.82791.43720.93880.72640.7981.17670.95261.2462
GMI 1.46810.29790.77940.9691.08180.62650.9311.1081.22771.0442
AQI 2.62051.16752.24541.36762.37940.96150.88761.08630.76890.8489
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 0.98561.13711.08730.56681.70540.89120.84981.46591.34651.0794
TATA -0.1104-0.13140.019-0.1319-0.0978-0.0602-0.04880.0049-0.0015-0.0392
M-score -1.07-3.08-1.77-2.77-2.15-2.69-2.95-2.48-2.70-2.66

CF Industries Holdings Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.9971.02840.97390.95260.89450.86181.76721.24621.64221.2913
GMI 1.19871.22891.15471.22771.13110.95411.02351.04391.24041.475
AQI 0.77880.8670.86820.76891.05250.9880.87690.84890.69740.6556
SGI 0.89140.85340.8620.86640.8660.87560.90850.90830.95480.9496
DEPI 1.11481.15231.22521.37211.3711.34521.37661.24711.19051.0112
SGAI 1.12941.12151.18311.05621.06141.07221.01841.64311.71333.0075
LVGI 1.73131.31091.30261.34651.06381.03431.10271.07940.85050.824
TATA 0.01830.01120.0224-0.0015-0.0241-0.0367-0.0298-0.0395-0.0335-0.0608
M-score -2.73-2.57-2.60-2.70-2.71-2.90-2.03-2.67-2.13-2.72
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