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ConocoPhillips (NYSE:COP)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

COP' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -0.77
Current: -2.81

-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 -2.61.


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 * 0.9874+0.528 * 1.0047+0.404 * 0.9792+0.892 * 0.9847+0.115 * 0.9895
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.936+4.679 * -0.0713-0.327 * 0.9299
=-2.81

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $8,651 Mil.
Revenue was 16048 + 13985 + 15470 + 14142 = $59,645 Mil.
Gross Profit was 6730 + 6167 + 7487 + 6628 = $27,012 Mil.
Total Current Assets was $20,400 Mil.
Total Assets was $120,025 Mil.
Property, Plant and Equipment(Net PPE) was $74,025 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,519 Mil.
Selling, General & Admin. Expense(SGA) was $871 Mil.
Total Current Liabilities was $17,117 Mil.
Long-Term Debt was $19,494 Mil.
Net Income was 2123 + 2487 + 2480 + 2050 = $9,140 Mil.
Non Operating Income was -18 + 24 + -9 + 7 = $4 Mil.
Cash Flow from Operations was 6336 + 3911 + 3705 + 3741 = $17,693 Mil.
Accounts Receivable was $8,898 Mil.
Revenue was 14651 + 16366 + 14713 + 14842 = $60,572 Mil.
Gross Profit was 6853 + 7150 + 6504 + 7054 = $27,561 Mil.
Total Current Assets was $24,235 Mil.
Total Assets was $117,780 Mil.
Property, Plant and Equipment(Net PPE) was $67,890 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,816 Mil.
Selling, General & Admin. Expense(SGA) was $945 Mil.
Total Current Liabilities was $18,315 Mil.
Long-Term Debt was $20,319 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)
=(8651 / 59645) / (8898 / 60572)
=0.1450415 / 0.14689956
=0.9874

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)
=(6167 / 60572) / (6730 / 59645)
=0.45501222 / 0.45287954
=1.0047

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 - (20400 + 74025) / 120025) / (1 - (24235 + 67890) / 117780)
=0.2132889 / 0.21782136
=0.9792

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
=59645 / 60572
=0.9847

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))
=(6816 / (6816 + 67890)) / (7519 / (7519 + 74025))
=0.09123765 / 0.09220789
=0.9895

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)
=(871 / 59645) / (945 / 60572)
=0.01460307 / 0.01560127
=0.936

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)
=((19494 + 17117) / 120025) / ((20319 + 18315) / 117780)
=0.30502812 / 0.32801834
=0.9299

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
=(9140 - 4 - 17693) / 120025
=-0.0713

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 -2.81 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.93123.44261.31271.34740.96340.54911.13910.91390.98390.9874
GMI 0.82650.57910.5970.6180.69310.9670.96750.96990.9861.0047
AQI 1.01310.97990.88320.88830.87220.88130.93860.9671.00430.9792
SGI 0.54120.30950.34990.41520.57670.92690.95761.00150.93940.9847
DEPI 1.24731.30171.02551.08340.88980.80150.93140.85630.96210.9895
SGAI 1.02851.4791.52681.89011.71841.08120.96720.70910.82190.936
LVGI 1.0121.0931.00540.94211.00620.92460.9930.99710.940.9299
TATA -0.0539-0.0587-0.0593-0.0479-0.0465-0.0581-0.0724-0.0665-0.0592-0.0713
M-score -2.35-1.43-3.40-3.28-3.46-3.31-2.77-2.86-2.79-2.81
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