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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 Consol Energy Inc was -1.77. The lowest was -3.81. And the median was -2.85.
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 Consol Energy Inc 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 * 0.6917||+||0.528 * 0.8821||+||0.404 * 0.825||+||0.892 * 1.1294||+||0.115 * 0.875|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9054||+||4.679 * -0.064||-||0.327 * 1.0006|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $260 Mil.|
Revenue was 935.665 + 884.616 + 937.37 + 969.153 = $3,727 Mil.
Gross Profit was 422.425 + 389.079 + 436.506 + 257.389 = $1,505 Mil.
Total Current Assets was $1,166 Mil.
Total Assets was $11,760 Mil.
Property, Plant and Equipment(Net PPE) was $10,162 Mil.
Depreciation, Depletion and Amortization(DDA) was $571 Mil.
Selling, General & Admin. Expense(SGA) was $464 Mil.
Total Current Liabilities was $1,148 Mil.
Long-Term Debt was $3,276 Mil.
Net Income was 73.666 + -1.645 + -24.935 + 116.003 = $163 Mil.
Non Operating Income was 0 + -20.99 + 0 + 0 = $-21 Mil.
Cash Flow from Operations was 86.609 + 293.024 + 221.045 + 336.102 = $937 Mil.
|Accounts Receivable was $333 Mil.
Revenue was 825.23 + 803.345 + 828.167 + 842.943 = $3,300 Mil.
Gross Profit was 320.367 + 326.085 + 355.633 + 173.619 = $1,176 Mil.
Total Current Assets was $1,446 Mil.
Total Assets was $11,394 Mil.
Property, Plant and Equipment(Net PPE) was $9,442 Mil.
Depreciation, Depletion and Amortization(DDA) was $461 Mil.
Selling, General & Admin. Expense(SGA) was $453 Mil.
Total Current Liabilities was $1,120 Mil.
Long-Term Debt was $3,164 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)|
|=||(259.817 / 3726.804)||/||(332.574 / 3299.685)|
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)|
|=||(389.079 / 3299.685)||/||(422.425 / 3726.804)|
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 - (1166.35 + 10162.472) / 11759.53)||/||(1 - (1445.592 + 9442.262) / 11393.667)|
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))|
|=||(461.122 / (461.122 + 9442.262))||/||(571.191 / (571.191 + 10162.472))|
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)|
|=||(463.685 / 3726.804)||/||(453.458 / 3299.685)|
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)|
|=||((3275.878 + 1147.961) / 11759.53)||/||((3163.559 + 1119.971) / 11393.667)|
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|
|=||(163.089 - -20.99||-||936.78)||/||11759.53|
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.
Consol Energy Inc has a M-score of -3.08 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
Consol Energy Inc Annual Data
Consol Energy Inc Quarterly Data