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Colfax Corp (NYSE:CFX)
Beneish M-Score
-2.67 (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.

Colfax Corp has a M-score of -2.67 suggests that the company is not a manipulator.

CFX' s Beneish M-Score Range Over the Past 10 Years
Min: -4.25   Max: 1.82
Current: -2.67

-4.25
1.82

During the past 11 years, the highest Beneish M-Score of Colfax Corp was 1.82. The lowest was -4.25. And the median was -2.51.


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 Colfax 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 * 1.0054+0.528 * 0.9877+0.404 * 1.0312+0.892 * 0.8959+0.115 * 0.912
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0618+4.679 * -0.0188-0.327 * 0.9836
=-2.67

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $990 Mil.
Revenue was 969.144 + 1025.375 + 911.07 + 1206.356 = $4,112 Mil.
Gross Profit was 295.874 + 328.037 + 294.438 + 391.847 = $1,310 Mil.
Total Current Assets was $1,999 Mil.
Total Assets was $7,040 Mil.
Property, Plant and Equipment(Net PPE) was $664 Mil.
Depreciation, Depletion and Amortization(DDA) was $156 Mil.
Selling, General & Admin. Expense(SGA) was $928 Mil.
Total Current Liabilities was $1,205 Mil.
Long-Term Debt was $1,532 Mil.
Net Income was 18.359 + 53.127 + 52.056 + 80.134 = $204 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 85.269 + 68.919 + -2.05 + 184.236 = $336 Mil.
Accounts Receivable was $1,099 Mil.
Revenue was 1164.453 + 1199.336 + 1054.331 + 1171.378 = $4,589 Mil.
Gross Profit was 373.195 + 388.171 + 325.632 + 357.381 = $1,444 Mil.
Total Current Assets was $2,218 Mil.
Total Assets was $7,529 Mil.
Property, Plant and Equipment(Net PPE) was $772 Mil.
Depreciation, Depletion and Amortization(DDA) was $162 Mil.
Selling, General & Admin. Expense(SGA) was $976 Mil.
Total Current Liabilities was $1,369 Mil.
Long-Term Debt was $1,608 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)
=(990.452 / 4111.945) / (1099.494 / 4589.498)
=0.2408719 / 0.23956738
=1.0054

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)
=(328.037 / 4589.498) / (295.874 / 4111.945)
=0.31471394 / 0.31863169
=0.9877

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 - (1999.092 + 664.2) / 7039.896) / (1 - (2218.072 + 772.115) / 7529.315)
=0.62168589 / 0.60286069
=1.0312

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
=4111.945 / 4589.498
=0.8959

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))
=(162.082 / (162.082 + 772.115)) / (156.052 / (156.052 + 664.2))
=0.17349874 / 0.19024885
=0.912

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)
=(928.228 / 4111.945) / (975.744 / 4589.498)
=0.2257394 / 0.21260364
=1.0618

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)
=((1532.267 + 1205.426) / 7039.896) / ((1608.165 + 1368.785) / 7529.315)
=0.38888259 / 0.39538125
=0.9836

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
=(203.676 - 0 - 336.374) / 7039.896
=-0.0188

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.

Colfax Corp has a M-score of -2.67 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.

Colfax Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.10430.96761.0021.00881.07350.93631.31711.09040.9146
GMI 1.02541.00210.96581.01471.0021.01991.17630.94810.9709
AQI 0.98090.85420.99141.06330.97690.99210.91151.03961.0831
SGI 1.13931.28631.19460.8681.03231.27945.64451.0751.0992
DEPI 1.05110.87981.15910.98370.88760.77610.97081.54060.7067
SGAI 1.07860.67221.54880.71121.14960.95290.97470.89791.0643
LVGI 1.05280.990.68570.86171.11271.21471.49030.92060.9025
TATA 0.0397-0.06690.0355-0.0148-0.0448-0.0483-0.0388-0.02780.0009
M-score -2.09-2.58-2.13-2.53-2.68-2.601.67-2.37-2.46

Colfax Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.58780.83261.09041.05781.11340.99870.91460.91830.91621.0054
GMI 0.97350.95630.94810.97220.97560.98250.97090.96220.9730.9877
AQI 1.01370.99511.03960.99861.14961.16111.08311.12351.04151.0312
SGI 1.75571.3261.0751.08551.1091.12951.09921.03870.97020.8959
DEPI 0.89661.28231.54061.31751.0780.85890.70670.66220.81630.912
SGAI 0.96350.94610.89790.9050.95430.98291.06431.08411.02781.0618
LVGI 0.90530.89990.92060.77040.93320.92390.90251.08070.90380.9836
TATA -0.0289-0.03-0.0278-0.01640.0022-0.00370.0009-0.0077-0.0224-0.0188
M-score -2.30-2.43-2.37-2.31-2.18-2.32-2.46-2.61-2.68-2.67
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