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GuruFocus has detected 2 Warning Signs with Consol Energy Inc $CNX.
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Consol Energy Inc (NYSE:CNX)
Beneish M-Score
-2.26 (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.

Consol Energy Inc has a M-score of -2.26 suggests that the company is not a manipulator.

CNX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.85   Max: -1.37
Current: -2.26

-3.85
-1.37

During the past 13 years, the highest Beneish M-Score of Consol Energy Inc was -1.37. The lowest was -3.85. And the median was -2.73.


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 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 * 1.932+0.528 * 1.7265+0.404 * 1.0899+0.892 * 0.753+0.115 * 0.8089
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.8704+4.679 * -0.1434-0.327 * 0.9959
=-2.26

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $220 Mil.
Revenue was 462.022 + 745.578 + 285.8 + 558.514 = $2,052 Mil.
Gross Profit was 99.103 + 415.104 + -73.036 + 192.446 = $634 Mil.
Total Current Assets was $626 Mil.
Total Assets was $9,184 Mil.
Property, Plant and Equipment(Net PPE) was $8,140 Mil.
Depreciation, Depletion and Amortization(DDA) was $599 Mil.
Selling, General & Admin. Expense(SGA) was $358 Mil.
Total Current Liabilities was $940 Mil.
Long-Term Debt was $2,762 Mil.
Net Income was -306.044 + 25.345 + -469.828 + -97.572 = $-848 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 82.647 + 162.897 + 95.299 + 128.442 = $469 Mil.
Accounts Receivable was $151 Mil.
Revenue was 665.983 + 720.933 + 545.574 + 792.654 = $2,725 Mil.
Gross Profit was 423.036 + 450.925 + 209.086 + 369.796 = $1,453 Mil.
Total Current Assets was $805 Mil.
Total Assets was $10,930 Mil.
Property, Plant and Equipment(Net PPE) was $9,669 Mil.
Depreciation, Depletion and Amortization(DDA) was $567 Mil.
Selling, General & Admin. Expense(SGA) was $254 Mil.
Total Current Liabilities was $1,685 Mil.
Long-Term Debt was $2,739 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)
=(220.222 / 2051.914) / (151.383 / 2725.144)
=0.10732516 / 0.05555046
=1.932

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)
=(1452.843 / 2725.144) / (633.617 / 2051.914)
=0.53312522 / 0.30879316
=1.7265

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 - (626.139 + 8140.439) / 9183.981) / (1 - (804.763 + 9669.377) / 10929.902)
=0.04544903 / 0.04169864
=1.0899

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
=2051.914 / 2725.144
=0.753

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))
=(567.12 / (567.12 + 9669.377)) / (598.503 / (598.503 + 8140.439))
=0.05540176 / 0.06848689
=0.8089

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)
=(357.916 / 2051.914) / (254.139 / 2725.144)
=0.17443031 / 0.09325709
=1.8704

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)
=((2762.069 + 940.014) / 9183.981) / ((2738.783 + 1685.359) / 10929.902)
=0.40310221 / 0.40477417
=0.9959

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
=(-848.099 - 0 - 469.285) / 9183.981
=-0.1434

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 -2.26 suggests that the company will not 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.

Consol Energy Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.62050.9761.60861.08711.22341.19890.79510.8080.69011.9335
GMI 1.19140.9170.82561.06460.7970.96061.35830.59240.99331.6076
AQI 0.72090.93371.00810.80641.51750.93870.45520.76961.22041.0899
SGI 0.95971.25831.03021.13290.83590.84020.89730.9710.84060.7524
DEPI 1.11150.97110.95251.25811.21091.09710.79961.01020.89890.8089
SGAI 1.24220.91091.01871.45590.71894.12890.54683.35310.50151.8598
LVGI 1.11381.10790.91031.64330.9070.96251.07161.00091.07570.9959
TATA -0.1037-0.1071-0.067-0.065-0.0715-0.02610.0001-0.05820.0015-0.1434
M-score -3.43-2.87-2.27-2.89-2.55-3.12-2.76-3.67-2.77-2.32

Consol Energy Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.36410.8080.82631.03191.16030.68210.77670.85830.75521.932
GMI 1.53350.48540.63360.65910.61011.03781.07271.2251.42681.7265
AQI 0.50630.76960.91050.85851.11121.22041.09241.58521.63111.0899
SGI 1.71340.9710.88370.74560.68360.85050.82280.84650.91260.753
DEPI 0.49991.01021.00950.99481.03660.89890.84820.84660.81640.8089
SGAI 0.18564.09314.20653.89373.34570.41620.45330.49990.63011.8704
LVGI 1.03661.00091.02341.13621.07511.07571.05930.93570.96530.9959
TATA -0.0079-0.0582-0.0458-0.01220.01510.07730.0654-0.0025-0.0179-0.1434
M-score -2.31-3.85-3.75-3.51-3.13-2.37-2.40-2.31-2.33-2.26
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