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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(6167 / 60572)||/||(6730 / 59645)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(9140 - 4||-||17693)||/||120025|
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.
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
ConocoPhillips Annual Data
ConocoPhillips Quarterly Data