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Colfax Corp (NYSE:CFX)
Beneish M-Score
-2.66 (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 -2.66 suggests that the company is not a manipulator.

CFX' s Beneish M-Score Range Over the Past 10 Years
Min: -2.68   Max: 1.67
Current: -2.66

-2.68
1.67

During the past 12 years, the highest Beneish M-Score of Colfax Corp was 1.67. The lowest was -2.68. And the median was -2.49.


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 * 1.006+0.528 * 1.0134+0.404 * 1.0514+0.892 * 0.8578+0.115 * 1.0014
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0444+4.679 * -0.0202-0.327 * 0.9646
=-2.66

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $888 Mil.
Revenue was 1061.464 + 969.144 + 1025.375 + 911.07 = $3,967 Mil.
Gross Profit was 333.425 + 295.874 + 328.037 + 294.438 = $1,252 Mil.
Total Current Assets was $1,760 Mil.
Total Assets was $6,733 Mil.
Property, Plant and Equipment(Net PPE) was $645 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $906 Mil.
Total Current Liabilities was $1,116 Mil.
Long-Term Debt was $1,412 Mil.
Net Income was 44.197 + 18.359 + 53.127 + 52.056 = $168 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 151.675 + 85.269 + 68.919 + -2.05 = $304 Mil.
Accounts Receivable was $1,029 Mil.
Revenue was 1206.356 + 1164.453 + 1199.336 + 1054.331 = $4,624 Mil.
Gross Profit was 391.847 + 373.195 + 388.171 + 325.632 = $1,479 Mil.
Total Current Assets was $2,074 Mil.
Total Assets was $7,212 Mil.
Property, Plant and Equipment(Net PPE) was $727 Mil.
Depreciation, Depletion and Amortization(DDA) was $175 Mil.
Selling, General & Admin. Expense(SGA) was $1,011 Mil.
Total Current Liabilities was $1,280 Mil.
Long-Term Debt was $1,527 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)
=(888.166 / 3967.053) / (1029.15 / 4624.476)
=0.22388559 / 0.22254413
=1.006

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)
=(295.874 / 4624.476) / (333.425 / 3967.053)
=0.3197865 / 0.31554255
=1.0134

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 - (1759.765 + 644.536) / 6732.919) / (1 - (2074.278 + 727.435) / 7211.517)
=0.64290362 / 0.61149464
=1.0514

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
=3967.053 / 4624.476
=0.8578

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))
=(174.724 / (174.724 + 727.435)) / (154.542 / (154.542 + 644.536))
=0.19367318 / 0.19340039
=1.0014

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)
=(905.952 / 3967.053) / (1011.171 / 4624.476)
=0.22836902 / 0.21865634
=1.0444

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)
=((1411.755 + 1116.344) / 6732.919) / ((1526.955 + 1280.125) / 7211.517)
=0.37548335 / 0.38924959
=0.9646

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
=(167.739 - 0 - 303.813) / 6732.919
=-0.0202

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 -2.66 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.10430.96761.0021.00881.07350.93631.31711.09040.91461.006
GMI 1.02541.00210.96581.01471.0021.01991.17630.94810.97091.0134
AQI 0.98090.85420.99141.06330.97690.99210.91151.03961.08661.0514
SGI 1.13931.28631.19460.8681.03231.27945.64451.0751.09920.8578
DEPI 1.05110.87981.15910.98370.88760.79620.94631.54060.70491.0014
SGAI 1.07860.67221.54880.71121.14960.95290.98880.88511.06431.0444
LVGI 1.05280.990.68570.86171.11271.21471.49030.92060.90410.9646
TATA 0.0219-0.01070.0355-0.0148-0.0448-0.0483-0.0388-0.02780.0009-0.0202
M-score -2.18-2.32-2.13-2.53-2.68-2.591.67-2.36-2.46-2.66

Colfax Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.83261.09041.05781.11340.99870.91460.91830.91621.00541.006
GMI 0.95630.94810.97220.97560.98250.97090.96220.9730.98771.0134
AQI 0.99511.03960.99861.14961.16111.08661.12351.04151.03121.0514
SGI 1.3261.0751.08551.1091.12951.09921.03870.97020.89590.8578
DEPI 1.27751.54061.31751.0780.85890.70490.66220.81630.9121.0014
SGAI 0.96010.88510.89210.94050.96861.06431.08411.02781.06181.0444
LVGI 0.89990.92060.77040.93320.92390.90411.08070.90380.98360.9646
TATA -0.03-0.0278-0.01640.0022-0.00370.0009-0.0077-0.0224-0.0188-0.0202
M-score -2.44-2.36-2.31-2.18-2.31-2.46-2.61-2.68-2.67-2.66
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