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GuruFocus has detected 5 Warning Signs with Cencosud SA $CNCO.
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Cencosud SA (NYSE:CNCO)
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.

Cencosud SA has a M-score of signals that the company is a manipulator.

During the past 8 years, the highest Beneish M-Score of Cencosud SA was 1.51. The lowest was -2.83. And the median was -2.50.


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 Cencosud SA 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $217 Mil.
Revenue was 3787.15334709 + 3790.44238159 + 3679.22378018 + 4310.30953148 = $15,567 Mil.
Gross Profit was 1076.61018844 + 1110.01770851 + 1066.30788772 + 1273.17127124 = $4,526 Mil.
Total Current Assets was $3,682 Mil.
Total Assets was $15,170 Mil.
Property, Plant and Equipment(Net PPE) was $3,961 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $3,488 Mil.
Total Current Liabilities was $3,730 Mil.
Long-Term Debt was $4,083 Mil.
Net Income was 53.0407962615 + 128.505333414 + 161.500276996 + 266.747118783 = $610 Mil.
Non Operating Income was -293.527863082 + 103.9283194 + -40.1617538142 + -121.060728928 = $-351 Mil.
Cash Flow from Operations was 129.744065971 + -101.519199081 + -79.8628232854 + 585.962681313 = $534 Mil.
Accounts Receivable was $1,263 Mil.
Revenue was 3792.82511211 + 4124.15928646 + 4231.5745003 + 4963.66803319 = $17,112 Mil.
Gross Profit was 1095.69308055 + 1205.34369189 + 1181.34090641 + 1349.99212355 = $4,832 Mil.
Total Current Assets was $3,482 Mil.
Total Assets was $14,553 Mil.
Property, Plant and Equipment(Net PPE) was $4,046 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $3,999 Mil.
Total Current Liabilities was $3,429 Mil.
Long-Term Debt was $4,140 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)
=(217.159985131 / 15567.1290403) / (1262.61991258 / 17112.2269321)
=0.01394991 / 0.07378466
=

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)
=(4832.36980239 / 17112.2269321) / (4526.10705591 / 15567.1290403)
=0.28239281 / 0.29074771
=

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 - (3682.46709656 + 3960.69277174) / 15169.8245767) / (1 - (3481.80592609 + 4046.04075609) / 14552.7601181)
=0.4961603 / 0.48272035
=

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
=15567.1290403 / 17112.2269321
=

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))
=(0 / (0 + 4046.04075609)) / (0 / (0 + 3960.69277174))
=0 / 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)
=(3487.63049383 / 15567.1290403) / (3999.2159774 / 17112.2269321)
=0.22403813 / 0.23370517
=

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)
=((4083.098067 + 3729.70055532) / 15169.8245767) / ((4139.90605665 + 3429.19339275) / 14552.7601181)
=0.51502234 / 0.52011436
=

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
=(609.793525454 - -350.822026424 - 534.324724918) / 15169.8245767
=0.0281

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.

Cencosud SA has a M-score of 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 local exchange's currency.

Cencosud SA Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

Cencosud SA Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.1461.1817
GMI 1.02991.0452
AQI 1.06330.9736
SGI 0.77240.7345
DEPI 00
SGAI 0.99561.0049
LVGI 0.84551.7723
TATA 0.005-0.0049
M-score -2.55-2.93
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