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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 6 years, the highest Beneish M-Score of Cencosud SA was -2.27. The lowest was -2.47. And the median was -2.37.
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 *|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $226 Mil.|
Revenue was 4244.2284592 + 4823.732304 + 4193.601592 + 4136.055856 = $17,398 Mil.
Gross Profit was 1185.5196944 + 1332.1869872 + 1120.3453136 + 1111.886224 = $4,750 Mil.
Total Current Assets was $4,604 Mil.
Total Assets was $16,659 Mil.
Property, Plant and Equipment(Net PPE) was $4,645 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $3,806 Mil.
Total Current Liabilities was $4,001 Mil.
Long-Term Debt was $4,626 Mil.
Net Income was 35.2954656 + 163.8993296 + 3.3973296 + 39.2664176 = $242 Mil.
Non Operating Income was -108.062304 + -122.5987008 + -115.6500864 + -87.7604448 = $-434 Mil.
Cash Flow from Operations was 47.1177488 + 484.637824 + 65.1952688 + 196.0425536 = $793 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 3984.2570416 + 4898.2026 + 3858.829368 + 0 = $12,741 Mil.
Gross Profit was 1069.5910928 + 1581.9975184 + 1038.0586336 + 0 = $3,690 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 $76 Mil.
Selling, General & Admin. Expense(SGA) was $2,678 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $0 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)|
|=||(226.2570352 / 17397.6182112)||/||(0 / 12741.2890096)|
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)|
|=||(1332.1869872 / 12741.2890096)||/||(1185.5196944 / 17397.6182112)|
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 - (4604.4853264 + 4644.8395984) / 16659.354096)||/||(1 - (0 + 0) / 0)|
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))|
|=||(75.7842192 / (75.7842192 + 0))||/||(85.5919984 / (85.5919984 + 4644.8395984))|
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)|
|=||(3806.4221072 / 17397.6182112)||/||(2677.6356112 / 12741.2890096)|
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)|
|=||((4625.990328 + 4000.778912) / 16659.354096)||/||((0 + 0) / 0)|
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|
|=||(241.8585424 - -434.071536||-||792.9933952)||/||16659.354096|
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.
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
Cencosud SA Annual Data
Cencosud SA Quarterly Data