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Beneish M-Score 1.36 higher than -2.22, which implies that it might have manipulated its financial results.
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 8 years, the highest Beneish M-Score of Cencosud SA was 1.36. The lowest was -2.47. And the median was -2.29.
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 * 5.6322||+||0.528 * 0.9618||+||0.404 * 1.1012||+||0.892 * 1.0422||+||0.115 * 0.8024|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0743||+||4.679 * -0.0235||-||0.327 * 2.036|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $1,424 Mil.|
Revenue was 4276.3648 + 4187.3808752 + 4244.2284592 + 4823.732304 = $17,532 Mil.
Gross Profit was 1229.144 + 1221.9047568 + 1185.5196944 + 1332.1869872 = $4,969 Mil.
Total Current Assets was $3,926 Mil.
Total Assets was $16,408 Mil.
Property, Plant and Equipment(Net PPE) was $4,562 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $4,057 Mil.
Total Current Liabilities was $3,866 Mil.
Long-Term Debt was $4,668 Mil.
Net Income was -47.8432 + 82.2646032 + 35.2954656 + 163.8993296 = $234 Mil.
Non Operating Income was -129.2816 + 70.6914128 + -108.062304 + -122.5987008 = $-289 Mil.
Cash Flow from Operations was 0 + 376.7096848 + 47.1177488 + 484.637824 = $908 Mil.
|Accounts Receivable was $243 Mil.
Revenue was 4193.601592 + 4136.055856 + 3984.2570416 + 4507.588664 = $16,822 Mil.
Gross Profit was 1120.3453136 + 1111.886224 + 1069.5910928 + 1283.3702336 = $4,585 Mil.
Total Current Assets was $4,554 Mil.
Total Assets was $17,105 Mil.
Property, Plant and Equipment(Net PPE) was $5,053 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $3,623 Mil.
Total Current Liabilities was $4,370 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)|
|=||(1423.5888 / 17531.7064384)||/||(242.5200496 / 16821.5031536)|
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)|
|=||(1221.9047568 / 16821.5031536)||/||(1229.144 / 17531.7064384)|
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 - (3925.6944 + 4561.8624) / 16408.0624)||/||(1 - (4554.2952496 + 5052.5878704) / 17104.8426048)|
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 + 5052.5878704))||/||(85.5919984 / (85.5919984 + 4561.8624))|
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)|
|=||(4056.9384528 / 17531.7064384)||/||(3623.2445056 / 16821.5031536)|
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)|
|=||((4667.6944 + 3866.3744) / 16408.0624)||/||((0 + 4369.6708416) / 17104.8426048)|
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|
|=||(233.6161984 - -289.251192||-||908.4652576)||/||16408.0624|
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 1.36 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