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ConocoPhillips (NYSE:COP)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

COP' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -0.77
Current: -2.79

-3.46
-0.77

During the past 13 years, the highest Beneish M-Score of ConocoPhillips was -0.77. The lowest was -3.46. And the median was -2.65.


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 * 0.9839+0.528 * 0.986+0.404 * 1.0043+0.892 * 0.9394+0.115 * 0.9621
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8219+4.679 * -0.0592-0.327 * 0.94
=-2.79

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $8,487 Mil.
Revenue was 13985 + 15470 + 14142 + 14651 = $58,248 Mil.
Gross Profit was 6167 + 7487 + 6628 + 6853 = $27,135 Mil.
Total Current Assets was $19,023 Mil.
Total Assets was $118,057 Mil.
Property, Plant and Equipment(Net PPE) was $72,827 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,434 Mil.
Selling, General & Admin. Expense(SGA) was $854 Mil.
Total Current Liabilities was $15,129 Mil.
Long-Term Debt was $21,073 Mil.
Net Income was 2487 + 2480 + 2050 + 2139 = $9,156 Mil.
Non Operating Income was 24 + -9 + 7 + 36 = $58 Mil.
Cash Flow from Operations was 3911 + 3705 + 3741 + 4730 = $16,087 Mil.
Accounts Receivable was $9,182 Mil.
Revenue was 16366 + 14713 + 14842 + 16083 = $62,004 Mil.
Gross Profit was 7150 + 6504 + 7054 + 7771 = $28,479 Mil.
Total Current Assets was $23,989 Mil.
Total Assets was $117,144 Mil.
Property, Plant and Equipment(Net PPE) was $67,263 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,580 Mil.
Selling, General & Admin. Expense(SGA) was $1,106 Mil.
Total Current Liabilities was $17,443 Mil.
Long-Term Debt was $20,770 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)
=(8487 / 58248) / (9182 / 62004)
=0.14570457 / 0.14808722
=0.9839

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)
=(7487 / 62004) / (6167 / 58248)
=0.45930908 / 0.4658529
=0.986

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 - (19023 + 72827) / 118057) / (1 - (23989 + 67263) / 117144)
=0.22198599 / 0.22102711
=1.0043

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
=58248 / 62004
=0.9394

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))
=(6580 / (6580 + 67263)) / (7434 / (7434 + 72827))
=0.08910797 / 0.09262282
=0.9621

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)
=(854 / 58248) / (1106 / 62004)
=0.01466145 / 0.01783756
=0.8219

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)
=((21073 + 15129) / 118057) / ((20770 + 17443) / 117144)
=0.30664848 / 0.32620535
=0.94

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
=(9156 - 58 - 16087) / 118057
=-0.0592

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 -2.79 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.55440.87971.14911.12380.57951.77980.91793.14260.5920.9839
GMI 1.64940.63360.86611.01171.16331.02650.98810.60340.94930.986
AQI 1.00351.05411.06211.1090.741.0670.87961.01310.87221.0043
SGI 1.12961.54451.02811.03171.26570.6191.30360.33260.93850.9394
DEPI 0.98580.96190.92640.91360.87971.01170.96891.24730.88980.9621
SGAI 0.86450.88481.10710.97020.85040.8290.84051.29721.36240.8219
LVGI 0.87640.93051.00120.8831.28890.97280.96281.0121.00620.94
TATA -0.0578-0.0723-0.0601-0.0818-0.0695-0.0696-0.0564-0.0471-0.0465-0.0592
M-score -1.72-2.58-2.67-2.64-3.06-2.35-2.57-1.56-3.28-2.79

ConocoPhillips Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.57971.93123.44261.31271.34740.96340.54911.13910.91390.9839
GMI 0.96990.82650.57910.5970.6180.69310.9670.96750.96990.986
AQI 1.02111.01310.97990.88320.88830.87220.88130.93860.9671.0043
SGI 0.7710.54120.30950.34990.41520.57670.92690.95761.00150.9394
DEPI 1.17631.24731.30171.02551.08340.88980.80150.93140.85630.9621
SGAI 1.04851.02851.4791.52681.89011.71841.08120.96720.70910.8219
LVGI 1.06251.0121.0931.00540.94211.00620.92460.9930.99710.94
TATA -0.0676-0.0563-0.061-0.0593-0.0479-0.0465-0.0581-0.0724-0.0665-0.0592
M-score -2.48-2.36-1.44-3.40-3.28-3.46-3.31-2.77-2.86-2.79
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