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Energy Company of Minas Gerais (NYSE:CIG)
Beneish M-Score
-2.45 (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 -3.02 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: -2.45

-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 -2.43.


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 * 0.7758+0.528 * 0.9898+0.404 * 1.1352+0.892 * 0.9359+0.115 * 0.5567
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1236+4.679 * -0.0535-0.327 * 1.0128
=-3.02

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

This Year (Sep15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $782 Mil.
Revenue was 1225.66099611 + 1732.81486004 + 2363.62844922 + 1624.10710467 = $6,946 Mil.
Gross Profit was 344.076655052 + 677.121830511 + 739.289904993 + 555.626844604 = $2,316 Mil.
Total Current Assets was $2,126 Mil.
Total Assets was $9,885 Mil.
Property, Plant and Equipment(Net PPE) was $1,012 Mil.
Depreciation, Depletion and Amortization(DDA) was $288 Mil.
Selling, General & Admin. Expense(SGA) was $424 Mil.
Total Current Liabilities was $2,459 Mil.
Long-Term Debt was $2,380 Mil.
Net Income was 42.7854068457 + 171.610373751 + 422.815776524 + 12.4042944523 = $650 Mil.
Non Operating Income was 47.9094076655 + 5.4632515988 + -90.9546159961 + 56.8886607639 = $19 Mil.
Cash Flow from Operations was 363.291658127 + 156.184722178 + 183.579999243 + 455.964754694 = $1,159 Mil.
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 + 439.710268428 + 484.540636042 = $2,449 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.



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)
=(781.922525108 / 6946.21141004) / (1076.92307692 / 7421.71712757)
=0.1125682 / 0.1451043
=0.7758

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)
=(677.121830511 / 7421.71712757) / (344.076655052 / 6946.21141004)
=0.33003367 / 0.33343575
=0.9898

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 - (2126.46034023 + 1011.99016192) / 9885.47858168) / (1 - (3289.35599284 + 2548.30053667) / 14639.9821109)
=0.68251911 / 0.60125248
=1.1352

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
=6946.21141004 / 7421.71712757
=0.9359

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))
=(358.182823269 / (358.182823269 + 2548.30053667)) / (287.738708355 / (287.738708355 + 1011.99016192))
=0.12323581 / 0.22138364
=0.5567

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)
=(424.170945738 / 6946.21141004) / (403.33577094 / 7421.71712757)
=0.06106508 / 0.05434534
=1.1236

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)
=((2380.09838082 + 2459.26419348) / 9885.47858168) / ((3173.97137746 + 3902.05724508) / 14639.9821109)
=0.48954257 / 0.48333588
=1.0128

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
=(649.615851573 - 19.3067040322 - 1159.02113424) / 9885.47858168
=-0.0535

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 -3.02 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 1.09680.96110.69040.98651.13730.91651.60210.5060.83861.5342
GMI 1.01890.96331.08581.07131.72570.83481.29161.00760.94751.2248
AQI 1.05960.86670.9861.22462.15191.05040.90751.18651.12581.0304
SGI 1.22121.31341.08061.49580.88821.13381.03310.70151.18680.7418
DEPI 0.91680.95211.14351.08690.46350.99471.03720.82220.98290.7219
SGAI 1.08362.24340.37510.98410.40841.29021.35270.71320.63632.0283
LVGI 1.04490.97860.96541.08421.16341.03751.07970.75771.18891.0247
TATA -0.0718-0.0612-0.0663-0.0645-0.0357-0.03970.022-0.0462-0.0262-0.0406
M-score -2.53-2.81-2.83-2.24-1.79-2.75-1.76-3.23-2.56-2.49

Energy Company of Minas Gerais Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Jun15Sep15Dec15
DSRI 0.75210.49271.49470.81670.7758
GMI 1.71821.52160.92280.87490.9898
AQI 1.06721.18651.08691.12581.1352
SGI 0.80990.72050.89881.21860.9359
DEPI 0.81970.80671.12160.95350.5567
SGAI 0.32290.28420.79870.65231.1236
LVGI 0.80890.75771.09541.18891.0128
TATA 0.0442-0.0489-0.0268-0.0244-0.0535
M-score -2.11-2.89-2.23-2.59-3.02
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