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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.
Energy Company of Minas Gerais has a M-score of signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Energy Company of Minas Gerais was 0.82. The lowest was -4.14. And the median was -2.43.
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 Energy Company of Minas Gerais 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 *||+||0.528 *||+||0.404 *||+||0.892 *||+||0.115 *|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 *||+||4.679 *||-||0.327 *|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,331 Mil.|
Revenue was 2132.00716525 + 1661.35792121 + 1620.65813528 + 1527.08703375 = $6,941 Mil.
Gross Profit was 884.430810569 + 673.093042749 + 415.904936015 + 404.973357016 = $2,378 Mil.
Total Current Assets was $3,042 Mil.
Total Assets was $14,209 Mil.
Property, Plant and Equipment(Net PPE) was $2,582 Mil.
Depreciation, Depletion and Amortization(DDA) was $353 Mil.
Selling, General & Admin. Expense(SGA) was $394 Mil.
Total Current Liabilities was $3,018 Mil.
Long-Term Debt was $3,184 Mil.
Net Income was 559.824899239 + 348.700754401 + 360.603290676 + 273.978685613 = $1,543 Mil.
Non Operating Income was 84.2727272727 + 119.446772842 + 143.053016453 + 99.4671403197 = $446 Mil.
Cash Flow from Operations was 276.757725034 + 360.854987427 + 326.325411335 + 694.937833037 = $1,659 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 1837.87806097 + 1878.20512821 + 1809.35960591 + 1705.91133005 = $7,231 Mil.
Gross Profit was 674.860569715 + 677.021696252 + 489.162561576 + 526.600985222 = $2,368 Mil.
Total Current Assets was $0 Mil.
Total Assets was $0 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $360 Mil.
Selling, General & Admin. Expense(SGA) was $381 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1330.94491715 / 6941.11025549)||/||(0 / 7231.35412514)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(673.093042749 / 7231.35412514)||/||(884.430810569 / 6941.11025549)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (3041.64800717 + 2582.17644425) / 14208.6878639)||/||(1 - (0 + 0) / 0)|
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.
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))|
|=||(360.168584347 / (360.168584347 + 0))||/||(353.453903244 / (353.453903244 + 2582.17644425))|
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)|
|=||(394.345700678 / 6941.11025549)||/||(380.896504833 / 7231.35412514)|
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)|
|=||((3183.60949395 + 3017.91312136) / 14208.6878639)||/||((0 + 0) / 0)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1543.10762993 - 446.239656887||-||1658.87595683)||/||14208.6878639|
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.
Energy Company of Minas Gerais has a M-score of signals that the company is likely to be a manipulator.
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
Energy Company of Minas Gerais Annual Data
Energy Company of Minas Gerais Quarterly Data