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ConocoPhillips (NYSE:COP)
Beneish M-Score
-3.00 (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.

ConocoPhillips has a M-score of -3.00 suggests that the company is not a manipulator.

COP' s Beneish M-Score Range Over the Past 10 Years
Min: -4.34   Max: -0.26
Current: -3

-4.34
-0.26

During the past 13 years, the highest Beneish M-Score of ConocoPhillips was -0.26. The lowest was -4.34. And the median was -2.62.


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 ConocoPhillips 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 * 1.0116+0.528 * 2.0881+0.404 * 1.0497+0.892 * 0.6001+0.115 * 0.8381
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.1742+4.679 * -0.102-0.327 * 1.2068
=-3.00

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $3,144 Mil.
Revenue was 5575 + 5015 + 6766 + 7507 = $24,863 Mil.
Gross Profit was 2128 + 1436 + -1698 + 2404 = $4,270 Mil.
Total Current Assets was $9,259 Mil.
Total Assets was $96,054 Mil.
Property, Plant and Equipment(Net PPE) was $63,685 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,229 Mil.
Selling, General & Admin. Expense(SGA) was $929 Mil.
Total Current Liabilities was $7,348 Mil.
Long-Term Debt was $27,346 Mil.
Net Income was -1071 + -1469 + -3450 + -1071 = $-7,061 Mil.
Non Operating Income was -45 + -152 + -2350 + 72 = $-2,475 Mil.
Cash Flow from Operations was 1259 + 421 + 1596 + 1934 = $5,210 Mil.
Accounts Receivable was $5,179 Mil.
Revenue was 8660 + 8002 + 11851 + 12917 = $41,430 Mil.
Gross Profit was 3632 + 2963 + 2089 + 6173 = $14,857 Mil.
Total Current Assets was $11,944 Mil.
Total Assets was $112,003 Mil.
Property, Plant and Equipment(Net PPE) was $74,387 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,827 Mil.
Selling, General & Admin. Expense(SGA) was $712 Mil.
Total Current Liabilities was $8,734 Mil.
Long-Term Debt was $24,787 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)
=(3144 / 24863) / (5179 / 41430)
=0.12645296 / 0.12500603
=1.0116

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)
=(14857 / 41430) / (4270 / 24863)
=0.35860488 / 0.17174114
=2.0881

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 - (9259 + 63685) / 96054) / (1 - (11944 + 74387) / 112003)
=0.24059383 / 0.22920815
=1.0497

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
=24863 / 41430
=0.6001

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))
=(8827 / (8827 + 74387)) / (9229 / (9229 + 63685))
=0.1060759 / 0.12657377
=0.8381

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)
=(929 / 24863) / (712 / 41430)
=0.03736476 / 0.01718561
=2.1742

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)
=((27346 + 7348) / 96054) / ((24787 + 8734) / 112003)
=0.36119266 / 0.29928663
=1.2068

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
=(-7061 - -2475 - 5210) / 96054
=-0.102

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.

ConocoPhillips has a M-score of -3.00 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 own currency.

ConocoPhillips Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.14911.12380.57951.77980.80033.60410.57570.98630.84651.1599
GMI 0.86611.01171.16331.05810.98030.59010.90181.03791.15131.7145
AQI 1.06211.1090.741.0670.87961.01310.87221.00431.00611.0219
SGI 1.02811.03171.26570.6191.30360.33260.93850.93940.95310.5572
DEPI 0.92640.91360.87971.01170.96891.31830.84190.96210.93160.8244
SGAI 1.10710.97020.85040.8290.84051.29721.36240.82190.9032.3269
LVGI 1.00120.8831.28890.97280.96281.0121.00620.940.94921.1528
TATA -0.0359-0.0719-0.2763-0.0615-0.044-0.0469-0.0465-0.0536-0.0758-0.1
M-score -2.56-2.59-4.02-2.29-2.62-1.13-3.33-2.73-2.91-3.11

ConocoPhillips Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.9630.9690.95690.84650.8010.91730.93031.15991.18511.0116
GMI 1.05861.06821.12231.13951.16921.26261.44431.71451.87622.0881
AQI 0.97921.05711.041.00611.06441.01811.01941.02191.01041.0497
SGI 0.98471.00550.95090.95310.79590.68820.62480.55720.58870.6001
DEPI 0.98950.99070.98270.93160.8910.87910.85250.82440.84360.8381
SGAI 0.9360.98681.08620.9031.02711.15471.51012.32692.33792.1742
LVGI 0.92990.90750.90460.94920.94981.01811.10181.15281.25161.2068
TATA -0.0657-0.0628-0.0638-0.0757-0.0584-0.063-0.0846-0.099-0.0961-0.102
M-score -2.78-2.71-2.77-2.92-3.00-3.03-3.17-3.10-2.99-3.00
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