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Energy Company of Minas Gerais (NYSE:CIG)
Beneish M-Score
0.00 (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.

Energy Company of Minas Gerais has a M-score of -1.41 signals that the company is a manipulator.

CIG' s 10-Year Beneish M-Score Range
Min: -4   Max: 1.25
Current: 0

-4
1.25

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.


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 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
=-1.41

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

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

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)
=(911.986588433 / 11984.4216401) / (1545.61724138 / 9203.18721308)
=0.07609767 / 0.16794369
=0.4531

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)
=(48.7317184644 / 9203.18721308) / (883.057418273 / 11984.4216401)
=0.48615466 / 0.21194252
=2.2938

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 - (2795.05448449 + 2437.97150042) / 12495.3897737) / (1 - (4911.3817734 + 4311.47832512) / 19321.5059113)
=0.58120346 / 0.5226635
=1.112

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
=11984.4216401 / 9203.18721308
=1.3022

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))
=0.09103256 / 0.13598965
=0.6694

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)
=-0.05184792 / 0.18054379
=-0.2872

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)
=0.44076608 / 0.5279139
=0.8349

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
=(2457.74849647 - -45.3511363453 - 1605.28606683) / 12495.3897737
=0.0719

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.


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.

Energy Company of Minas Gerais Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.77791.64420.99231.17510.69451.22640.87110.87511.4720.5093
GMI 0.97260.86251.03471.09371.08581.67511.12780.95171.10870.9849
AQI 0.96020.88311.05960.86670.9862.2641.16121.04450.91491.1865
SGI 1.34581.16471.21941.31761.11251.15171.20671.07171.03170.6735
DEPI 1.11071.07780.91680.95211.14350.5271.02480.96340.9990.8222
SGAI 0.90470.84415.45960.59210.37510.56320.66561.38891.34720.1357
LVGI 1.02521.22721.04490.97860.96541.19571.06971.04441.05770.7577
TATA 0.01040.0002-0.0718-0.0612-0.0663-0.0144-0.0334-0.040.0219-0.0462
M-score -2.34-1.90-3.38-2.25-2.80-1.38-2.40-2.81-1.97-3.16

Energy Company of Minas Gerais Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Jun13Sep13Dec13
DSRI 1.06730.79970.77440.73921.01550.40790.51090.4531
GMI 0.90050.70250.95980.94381.32511.82151.962.2938
AQI 2.44861.04451.08881.04070.91491.01161.03261.112
SGI 1.14111.17271.08171.00571.49541.26261.06541.3022
DEPI 0.63770.8890.87441.10411.03850.91980.82660.6694
SGAI 5.08946.56461.14471.01520.58520.11010.0914-0.2872
LVGI 0.92811.04441.03941.05781.05770.83380.79360.8349
TATA -0.0293-0.0429-0.0446-0.00480.05650.07130.03690.0719
M-score -2.62-3.83-2.86-2.76-1.57-1.82-1.98-1.41
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