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Energy Company of Minas Gerais (NYSE:CIG)
Beneish M-Score
-2.35 (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 -2.36 suggests that the company is not a manipulator.

CIG' s 10-Year Beneish M-Score Range
Min: -4.74   Max: 1.25
Current: -2.35

-4.74
1.25

During the past 13 years, the highest Beneish M-Score of Energy Company of Minas Gerais was 1.25. The lowest was -4.74. 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 * 1.2818+0.528 * 0.9035+0.404 * 1.0869+0.892 * 1.0481+0.115 * 0.9841
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0227+4.679 * -0.0268-0.327 * 1.0954
=-2.36

* 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 $1,077 Mil.
Revenue was 2118.85420394 + 2047.64387097 + 1688.96463571 + 1566.25441696 = $7,422 Mil.
Gross Profit was 675.731663685 + 849.433978495 + 684.277801449 + 401.943462898 = $2,611 Mil.
Total Current Assets was $3,289 Mil.
Total Assets was $14,640 Mil.
Property, Plant and Equipment(Net PPE) was $2,548 Mil.
Depreciation, Depletion and Amortization(DDA) was $358 Mil.
Selling, General & Admin. Expense(SGA) was $403 Mil.
Total Current Liabilities was $3,902 Mil.
Long-Term Debt was $3,174 Mil.
Net Income was 331.338998211 + 537.672688172 + 354.495100128 + 348.498233216 = $1,572 Mil.
Non Operating Income was -24.7558139535 + 80.9380645161 + 121.431614827 + 138.250883392 = $316 Mil.
Cash Flow from Operations was 699.910554562 + 265.806451613 + 366.851299531 + 315.371024735 = $1,648 Mil.
Accounts Receivable was $802 Mil.
Revenue was 1582.60009204 + 1853.62600806 + 1833.01251203 + 1812.03749383 = $7,081 Mil.
Gross Profit was 420.020708698 + 680.643145161 + 660.73147257 + 489.88653182 = $2,251 Mil.
Total Current Assets was $3,447 Mil.
Total Assets was $13,842 Mil.
Property, Plant and Equipment(Net PPE) was $2,738 Mil.
Depreciation, Depletion and Amortization(DDA) was $378 Mil.
Selling, General & Admin. Expense(SGA) was $376 Mil.
Total Current Liabilities was $2,867 Mil.
Long-Term Debt was $3,240 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)
=(1076.92307692 / 7421.71712757) / (801.656695812 / 7081.27610597)
=0.1451043 / 0.11320794
=1.2818

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)
=(849.433978495 / 7081.27610597) / (675.731663685 / 7421.71712757)
=0.31792036 / 0.35185751
=0.9035

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 - (3289.35599284 + 2548.30053667) / 14639.9821109) / (1 - (3446.84767602 + 2738.15002301) / 13841.6935113)
=0.60125248 / 0.55316178
=1.0869

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
=7421.71712757 / 7081.27610597
=1.0481

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))
=(377.925441962 / (377.925441962 + 2738.15002301)) / (358.182823269 / (358.182823269 + 2548.30053667))
=0.12128251 / 0.12323581
=0.9841

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)
=(403.33577094 / 7421.71712757) / (376.274245344 / 7081.27610597)
=0.05434534 / 0.0531365
=1.0227

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)
=((3173.97137746 + 3902.05724508) / 14639.9821109) / ((3240.22089277 + 2867.46433502) / 13841.6935113)
=0.48333588 / 0.44125274
=1.0954

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
=(1572.00501973 - 315.864748782 - 1647.93933044) / 14639.9821109
=-0.0268

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 -2.36 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.88451.3621.09680.96110.69041.19480.87580.98671.86980.4318
GMI 0.97260.86251.03471.09371.08581.67511.12780.95171.16160.9617
AQI 0.96020.88311.05960.86670.9862.2641.16121.04451.01251.0721
SGI 1.36751.16831.22121.31341.08061.21631.1711.05330.79440.9161
DEPI 1.11071.07780.91680.95211.14350.5271.02480.96340.91790.8948
SGAI 0.90470.84415.45960.59210.37510.56320.66561.38890.82551.1638
LVGI 1.02521.22721.04490.97860.96541.19571.06971.04440.9350.8572
TATA 0.01040.0002-0.0718-0.0612-0.0663-0.0144-0.0334-0.040.0177-0.0462
M-score -2.22-2.15-3.28-2.46-2.83-1.35-2.43-2.72-1.65-3.28

Energy Company of Minas Gerais Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.896510.97751.79340.7890.72730.45211.2818
GMI 0.94420.87020.93960.9891.57721.52921.51010.95670.9035
AQI 1.08881.07561.04071.01251.0241.06721.07211.11451.0869
SGI 1.1080.93930.90530.82820.81790.83740.87510.95771.0481
DEPI 0.91689.85181.08010.93440.83690.73280.88588.0440.9841
SGAI 1.19071.43611.03461.20710.28160.30720.27511.11661.0227
LVGI 1.03941.04471.05780.9350.82960.80890.85720.84881.0954
TATA -0.0473-0.0253-0.01220.0209-0.0039-0.0008-0.0515-0.0454-0.0268
M-score -2.75-1.76-2.67-1.83-2.38-2.42-2.88-1.87-2.36
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