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Colfax Corp (NYSE:CFX)
Beneish M-Score
-2.31 (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 -2.18 signals that the company is a manipulator.

CFX' s 10-Year Beneish M-Score Range
Min: -3.13   Max: 1.67
Current: -2.31

-3.13
1.67

During the past 10 years, the highest Beneish M-Score of Colfax Corp was 1.67. The lowest was -3.13. And the median was -2.45.


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 * 1.1134+0.528 * 0.9756+0.404 * 1.1496+0.892 * 1.109+0.115 * 1.078
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9531+4.679 * 0.0019-0.327 * 0.9332
=-2.18

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1,153 Mil.
Revenue was 1199.336 + 1054.331 + 1171.378 + 1014.57 = $4,440 Mil.
Gross Profit was 388.171 + 325.632 + 357.381 + 320.294 = $1,391 Mil.
Total Current Assets was $2,411 Mil.
Total Assets was $7,928 Mil.
Property, Plant and Equipment(Net PPE) was $812 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General & Admin. Expense(SGA) was $938 Mil.
Total Current Liabilities was $1,417 Mil.
Long-Term Debt was $1,812 Mil.
Net Income was 191.785 + 46.79 + 37.126 + 55.475 = $331 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 106.493 + -67.035 + 175.324 + 101.163 = $316 Mil.
Accounts Receivable was $934 Mil.
Revenue was 1074.118 + 947.143 + 1027.397 + 954.44 = $4,003 Mil.
Gross Profit was 337.822 + 290.725 + 307.57 + 287.987 = $1,224 Mil.
Total Current Assets was $2,287 Mil.
Total Assets was $6,094 Mil.
Property, Plant and Equipment(Net PPE) was $661 Mil.
Depreciation, Depletion and Amortization(DDA) was $134 Mil.
Selling, General & Admin. Expense(SGA) was $887 Mil.
Total Current Liabilities was $1,249 Mil.
Long-Term Debt was $1,411 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)
=(1152.915 / 4439.615) / (933.706 / 4003.098)
=0.25968806 / 0.23324585
=1.1134

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)
=(325.632 / 4003.098) / (388.171 / 4439.615)
=0.30578917 / 0.31342312
=0.9756

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 - (2410.752 + 812.353) / 7927.833) / (1 - (2286.941 + 661.329) / 6094.4)
=0.59344439 / 0.51623294
=1.1496

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
=4439.615 / 4003.098
=1.109

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))
=(133.955 / (133.955 + 661.329)) / (150.433 / (150.433 + 812.353))
=0.16843668 / 0.1562476
=1.078

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)
=(937.902 / 4439.615) / (887.281 / 4003.098)
=0.21125751 / 0.22164858
=0.9531

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)
=((1811.579 + 1417.281) / 7927.833) / ((1410.913 + 1248.976) / 6094.4)
=0.40728154 / 0.43644805
=0.9332

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
=(331.176 - 0 - 315.945) / 7927.833
=0.0019

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 -2.18 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.35721.04271.12290.63691.31711.098
GMI 0.96581.01471.0021.01991.17630.9481
AQI 0.99141.06330.97690.99210.91151.0348
SGI 1.19460.8681.03231.27945.64451.075
DEPI 1.15910.98370.88760.77610.97081.5457
SGAI 1.54880.71121.14960.95290.97470.8945
LVGI 0.68570.86171.11271.21471.49030.9202
TATA 0.0355-0.0148-0.0448-0.0483-0.0388-0.0279
M-score -1.81-2.50-2.63-2.871.67-2.36

Colfax Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 2.35011.81611.45371.31710.37920.58780.83261.0981.05781.1134
GMI 1.1591.17091.18041.17630.99780.97350.95630.94810.97220.9756
AQI 1.8061.82221.92380.91151.07341.01370.99511.03480.99861.1496
SGI 2.44793.53864.49145.64452.79671.75571.3261.0751.08551.109
DEPI 0.39660.32750.28490.97080.57130.89661.15981.54571.31751.078
SGAI 0.970.93870.92270.97470.95250.96350.94540.89670.90380.9531
LVGI 0.74940.77980.75581.49030.98220.90530.89990.92020.77040.9332
TATA -0.0083-0.0172-0.0206-0.0388-0.0344-0.0289-0.03-0.0279-0.01640.0019
M-score 0.440.881.431.67-1.62-2.30-2.45-2.36-2.31-2.18
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