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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 -1.25. The lowest was -4.61. And the median was -2.80.
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 * 0.8152||+||0.528 * 0.7978||+||0.404 * 1.0924||+||0.892 * 0.784||+||0.115 * 0.8417|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2908||+||4.679 * -0.083||-||0.327 * 1.0593|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $166 Mil.|
Revenue was 558.514 + 761.932 + 813.938 + 648.939 = $2,783 Mil.
Gross Profit was 192.446 + 398.164 + 479.916 + 228.477 = $1,299 Mil.
Total Current Assets was $1,146 Mil.
Total Assets was $10,716 Mil.
Property, Plant and Equipment(Net PPE) was $9,090 Mil.
Depreciation, Depletion and Amortization(DDA) was $660 Mil.
Selling, General & Admin. Expense(SGA) was $183 Mil.
Total Current Liabilities was $1,585 Mil.
Long-Term Debt was $2,759 Mil.
Net Income was -97.572 + 30.406 + 118.98 + -603.301 = $-551 Mil.
Non Operating Income was 0 + -67.751 + 0 + 0 = $-68 Mil.
Cash Flow from Operations was 128.442 + 101.566 + 110.068 + 65.845 = $406 Mil.
|Accounts Receivable was $260 Mil.
Revenue was 792.654 + 935.665 + 884.616 + 937.37 = $3,550 Mil.
Gross Profit was 369.796 + 126.426 + 391.345 + 434.385 = $1,322 Mil.
Total Current Assets was $933 Mil.
Total Assets was $11,781 Mil.
Property, Plant and Equipment(Net PPE) was $10,367 Mil.
Depreciation, Depletion and Amortization(DDA) was $626 Mil.
Selling, General & Admin. Expense(SGA) was $181 Mil.
Total Current Liabilities was $1,908 Mil.
Long-Term Debt was $2,601 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)|
|=||(165.941 / 2783.323)||/||(259.66 / 3550.305)|
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)|
|=||(1321.952 / 3550.305)||/||(1299.003 / 2783.323)|
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 - (1146.443 + 9090.391) / 10715.87)||/||(1 - (932.714 + 10366.581) / 11781.396)|
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))|
|=||(626.239 / (626.239 + 10366.581))||/||(659.959 / (659.959 + 9090.391))|
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)|
|=||(183.494 / 2783.323)||/||(181.33 / 3550.305)|
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)|
|=||((2758.961 + 1584.931) / 10715.87)||/||((2600.535 + 1907.984) / 11781.396)|
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|
|=||(-551.487 - -67.751||-||405.921)||/||10715.87|
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 -3.39 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