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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.
During the past 13 years, the highest Beneish M-Score of Energy Company of Minas Gerais was -1.69. The lowest was -3.58. And the median was -2.65.
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||+||0.528 * 0.8617||+||0.404 * 0||+||0.892 * 0.8566||+||0.115 * 0.1239|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1866||+||4.679 *||-||0.327 * 0|
|This Year (Dec14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 0 + 2118.85420394 + 2047.64387097 + 1688.96463571 = $5,855 Mil.
Gross Profit was 0 + 675.731663685 + 849.433978495 + 439.710268428 = $1,965 Mil.
Total Current Assets was $0 Mil.
Total Assets was $0 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $579 Mil.
Selling, General & Admin. Expense(SGA) was $385 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $0 Mil.
Net Income was 0 + 331.338998211 + 537.672688172 + 354.495100128 = $1,224 Mil.
Non Operating Income was 0 + -24.7558139535 + 80.9380645161 + 287.175117171 = $343 Mil.
Cash Flow from Operations was 1413.37673644 + 699.910554562 + 265.806451613 + 366.851299531 = $2,746 Mil.
|Accounts Receivable was $776 Mil.
Revenue was 1566.25441696 + 1582.60009204 + 1853.62600806 + 1833.01251203 = $6,835 Mil.
Gross Profit was 484.540636042 + 420.020708698 + 680.643145161 + 391.241578441 = $1,976 Mil.
Total Current Assets was $3,402 Mil.
Total Assets was $13,566 Mil.
Property, Plant and Equipment(Net PPE) was $2,597 Mil.
Depreciation, Depletion and Amortization(DDA) was $367 Mil.
Selling, General & Admin. Expense(SGA) was $379 Mil.
Total Current Liabilities was $2,678 Mil.
Long-Term Debt was $3,115 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)|
|=||(0 / 5855.46271061)||/||(775.618374558 / 6835.4930291)|
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)|
|=||(675.731663685 / 6835.4930291)||/||(0 / 5855.46271061)|
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 - (0 + 0) / 0)||/||(1 - (3401.9434629 + 2597.17314488) / 13566.254417)|
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))|
|=||(367.28137189 / (367.28137189 + 2597.17314488))||/||(578.776535472 / (578.776535472 + 0))|
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)|
|=||(384.784534191 / 5855.46271061)||/||(378.545265023 / 6835.4930291)|
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)|
|=||((0 + 0) / 0)||/||((3115.28268551 + 2677.56183746) / 13566.254417)|
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|
|=||(1223.50678651 - 343.357367733||-||2745.94504215)||/||0|
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 -3.81 suggests that the company will not 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