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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 -1.41 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Energy Company of Minas Gerais was 1.25. The lowest was -4.00. And the median was -2.52.
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 * 0.4531||+||0.528 * 2.2938||+||0.404 * 1.112||+||0.892 * 1.3022||+||0.115 * 0.6694|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * -0.2872||+||4.679 * 0.0719||-||0.327 * 0.8349|
|This Year (Dec13) TTM:||Last Year (Sep12) TTM:|
|Accounts Receivable was $912 Mil.|
Revenue was 4644.21793797 + 48.8555758684 + 0 + 7291.34812623 = $11,984 Mil.
Gross Profit was 883.057418273 + 48.7317184644 + 0 + 1608.21942801 = $2,540 Mil.
Total Current Assets was $2,795 Mil.
Total Assets was $12,495 Mil.
Property, Plant and Equipment(Net PPE) was $2,438 Mil.
Depreciation, Depletion and Amortization(DDA) was $384 Mil.
Selling, General & Admin. Expense(SGA) was $-621 Mil.
Total Current Liabilities was $2,482 Mil.
Long-Term Debt was $3,026 Mil.
Net Income was 970.309723386 + -156.973948812 + 0 + 1644.41272189 = $2,458 Mil.
Non Operating Income was 258.966471081 + -207.355575868 + 0 + -96.9620315582 = $-45 Mil.
Cash Flow from Operations was 360.854987427 + 326.325411335 + 348.579040853 + 569.526627219 = $1,605 Mil.
|Accounts Receivable was $1,546 Mil.
Revenue was 2369.52364532 + 2174.3546798 + 2239.74082073 + 2419.56806723 = $9,203 Mil.
Gross Profit was 808.554187192 + 766.569458128 + 2036.71706263 + 862.331652661 = $4,474 Mil.
Total Current Assets was $4,911 Mil.
Total Assets was $19,322 Mil.
Property, Plant and Equipment(Net PPE) was $4,311 Mil.
Depreciation, Depletion and Amortization(DDA) was $432 Mil.
Selling, General & Admin. Expense(SGA) was $1,662 Mil.
Total Current Liabilities was $5,430 Mil.
Long-Term Debt was $4,771 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)|
|=||(911.986588433 / 11984.4216401)||/||(1545.61724138 / 9203.18721308)|
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)|
|=||(48.7317184644 / 9203.18721308)||/||(883.057418273 / 11984.4216401)|
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 - (2795.05448449 + 2437.97150042) / 12495.3897737)||/||(1 - (4911.3817734 + 4311.47832512) / 19321.5059113)|
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))|
|=||(431.792033527 / (431.792033527 + 4311.47832512))||/||(383.720985762 / (383.720985762 + 2437.97150042))|
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)|
|=||(-621.367337536 / 11984.4216401)||/||(1661.57828307 / 9203.18721308)|
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)|
|=||((3025.5658005 + 2481.9782062) / 12495.3897737)||/||((4770.57881773 + 5429.51280788) / 19321.5059113)|
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|
|=||(2457.74849647 - -45.3511363453||-||1605.28606683)||/||12495.3897737|
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 -1.41 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