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Energy Company of Minas Gerais (NYSE:CIG)
Beneish M-Score
-2.46 (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 -2.42 suggests that the company is not a manipulator.

CIG' s Beneish M-Score Range Over the Past 10 Years
Min: -5.98   Max: 3.24
Current: -2.46

-5.98
3.24

During the past 13 years, the highest Beneish M-Score of Energy Company of Minas Gerais was 3.24. The lowest was -5.98. And the median was -2.35.


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 * 1.3202+0.528 * 1.5277+0.404 * 1.4173+0.892 * 0.6825+0.115 * 1.0273
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2656+4.679 * -0.0697-0.327 * 1.0893
=-2.42

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $962 Mil.
Revenue was 1388.7208623 + 1203.80205516 + 1357.05318491 + 1225.66099611 = $5,175 Mil.
Gross Profit was 361.280014021 + 356.391833423 + 116.468253968 + 344.076655052 = $1,178 Mil.
Total Current Assets was $2,382 Mil.
Total Assets was $12,490 Mil.
Property, Plant and Equipment(Net PPE) was $1,124 Mil.
Depreciation, Depletion and Amortization(DDA) was $217 Mil.
Selling, General & Admin. Expense(SGA) was $489 Mil.
Total Current Liabilities was $3,326 Mil.
Long-Term Debt was $3,163 Mil.
Net Income was 59.0193959222 + 1.38426176312 + 78.7881364667 + 42.7854068457 = $182 Mil.
Non Operating Income was 21.0226675235 + -27.4432125473 + 37.9862399505 + 47.9094076655 = $79 Mil.
Cash Flow from Operations was 287.72565286 + 162.249864792 + 159.245516388 + 363.547858168 = $973 Mil.
Accounts Receivable was $1,068 Mil.
Revenue was 1732.96911656 + 1861.99751703 + 2363.62844922 + 1624.10710467 = $7,583 Mil.
Gross Profit was 591.985731272 + 750.465397593 + 739.289904993 + 555.626844604 = $2,637 Mil.
Total Current Assets was $4,344 Mil.
Total Assets was $11,927 Mil.
Property, Plant and Equipment(Net PPE) was $1,531 Mil.
Depreciation, Depletion and Amortization(DDA) was $305 Mil.
Selling, General & Admin. Expense(SGA) was $567 Mil.
Total Current Liabilities was $3,024 Mil.
Long-Term Debt was $2,664 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)
=(962.201320325 / 5175.23709848) / (1067.9050037 / 7582.70218748)
=0.1859241 / 0.14083436
=1.3202

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)
=(2637.36787846 / 7582.70218748) / (1178.21675647 / 5175.23709848)
=0.34781372 / 0.2276643
=1.5277

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 - (2382.42682713 + 1124.32085062) / 12489.9222995) / (1 - (4343.60638879 + 1530.99591863) / 11926.9209757)
=0.71923383 / 0.50745022
=1.4173

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
=5175.23709848 / 7582.70218748
=0.6825

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))
=(304.520928296 / (304.520928296 + 1530.99591863)) / (216.556171174 / (216.556171174 + 1124.32085062))
=0.16590473 / 0.16150338
=1.0273

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)
=(489.491398726 / 5175.23709848) / (566.672386183 / 7582.70218748)
=0.09458338 / 0.07473225
=1.2656

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)
=((3163.22953789 + 3325.64117544) / 12489.9222995) / ((2664.13857377 + 3024.39181155) / 11926.9209757)
=0.51952851 / 0.47694878
=1.0893

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
=(181.977200998 - 79.4751025922 - 972.768892208) / 12489.9222995
=-0.0697

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 -2.42 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.

Energy Company of Minas Gerais Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.09680.96110.69041.19480.87581.25381.47140.43180.83861.6126
GMI 1.01890.96331.08581.67511.12780.98151.12630.96170.94751.2248
AQI 1.05960.86670.9862.2641.16121.04451.01251.07211.12581.0304
SGI 1.22121.31341.08061.21631.1710.82881.00950.91611.18680.7418
DEPI 0.91680.95211.14350.5271.02481.18030.74930.89480.98290.7219
SGAI 1.08362.24340.37510.56320.66561.10591.03681.16380.63632.0283
LVGI 1.04490.97860.96541.19571.06971.04440.9350.85721.18891.0247
TATA -0.0718-0.0612-0.0663-0.0144-0.0334-0.0483-0.0572-0.0593-0.0262-0.0406
M-score -2.53-2.81-2.83-1.35-2.43-2.63-2.25-3.34-2.56-2.42

Energy Company of Minas Gerais Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.28460.81840.96841.57581.3202
GMI 0.78860.78871.06841.31471.5277
AQI 1.08691.12580.8441.03041.4173
SGI 1.04581.21611.0240.75910.6825
DEPI 0.98410.95350.74280.71921.0273
SGAI 1.25580.84161.121.62851.2656
LVGI 1.09541.18890.98681.02471.0893
TATA -0.0356-0.0206-0.0069-0.0391-0.0697
M-score -2.50-2.65-2.59-2.32-2.42
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