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ConocoPhillips (NYSE:COP)
Beneish M-Score
-3.10 (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 -3.10 suggests that the company is not a manipulator.

COP' s Beneish M-Score Range Over the Past 10 Years
Min: -4.04   Max: -0.26
Current: -3.1

-4.04
-0.26

During the past 13 years, the highest Beneish M-Score of ConocoPhillips was -0.26. The lowest was -4.04. 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 * 1.1599+0.528 * 1.7145+0.404 * 1.0219+0.892 * 0.5572+0.115 * 0.8244
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.3269+4.679 * -0.099-0.327 * 1.1528
=-3.10

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $4,314 Mil.
Revenue was 6766 + 7507 + 8660 + 8002 = $30,935 Mil.
Gross Profit was -1698 + 2404 + 3632 + 2963 = $7,301 Mil.
Total Current Assets was $8,789 Mil.
Total Assets was $97,484 Mil.
Property, Plant and Equipment(Net PPE) was $66,446 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,113 Mil.
Selling, General & Admin. Expense(SGA) was $953 Mil.
Total Current Liabilities was $9,256 Mil.
Long-Term Debt was $23,453 Mil.
Net Income was -3450 + -1071 + -179 + 272 = $-4,428 Mil.
Non Operating Income was -2350 + 72 + -70 + 0 = $-2,348 Mil.
Cash Flow from Operations was 1596 + 1934 + 2172 + 1870 = $7,572 Mil.
Accounts Receivable was $6,675 Mil.
Revenue was 11851 + 12917 + 14701 + 16048 = $55,517 Mil.
Gross Profit was 2089 + 6173 + 7176 + 7026 = $22,464 Mil.
Total Current Assets was $15,068 Mil.
Total Assets was $116,539 Mil.
Property, Plant and Equipment(Net PPE) was $75,444 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,329 Mil.
Selling, General & Admin. Expense(SGA) was $735 Mil.
Total Current Liabilities was $11,537 Mil.
Long-Term Debt was $22,383 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)
=(4314 / 30935) / (6675 / 55517)
=0.13945369 / 0.12023344
=1.1599

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)
=(2404 / 55517) / (-1698 / 30935)
=0.40463282 / 0.23601099
=1.7145

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 - (8789 + 66446) / 97484) / (1 - (15068 + 75444) / 116539)
=0.22823233 / 0.22333296
=1.0219

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
=30935 / 55517
=0.5572

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))
=(8329 / (8329 + 75444)) / (9113 / (9113 + 66446))
=0.09942344 / 0.12060774
=0.8244

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)
=(953 / 30935) / (735 / 55517)
=0.03080653 / 0.01323919
=2.3269

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)
=((23453 + 9256) / 97484) / ((22383 + 11537) / 116539)
=0.33553198 / 0.29106136
=1.1528

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
=(-4428 - -2348 - 7572) / 97484
=-0.099

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 -3.10 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

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.98630.9630.9690.95690.84650.8010.91730.93031.1599
GMI 1.04861.05861.06821.12231.13951.16921.26261.44431.7145
AQI 1.00430.97921.05711.041.00611.06441.01811.01941.0219
SGI 0.93940.98471.00550.95090.95310.79590.68820.62480.5572
DEPI 0.96210.98950.99070.98270.93160.8910.87910.85250.8244
SGAI 0.82190.9360.98681.08620.9031.02711.15471.51012.3269
LVGI 0.940.92990.90750.90460.94920.94981.01811.10181.1528
TATA -0.0536-0.0657-0.0628-0.0638-0.0757-0.0566-0.063-0.0846-0.099
M-score -2.72-2.78-2.71-2.77-2.92-3.00-3.03-3.17-3.10
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