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ConocoPhillips (NYSE:COP)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

COP' s 10-Year Beneish M-Score Range
Min: -3.49   Max: -0.77
Current: -2.86

-3.49
-0.77

During the past 13 years, the highest Beneish M-Score of ConocoPhillips was -0.77. The lowest was -3.49. And the median was -2.67.


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 * 0.9315+0.528 * 1.0791+0.404 * 1.04+0.892 * 0.9509+0.115 * 0.9827
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0862+4.679 * -0.0728-0.327 * 0.9046
=-2.86

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $7,255 Mil.
Revenue was 12917 + 14701 + 16048 + 13985 = $57,651 Mil.
Gross Profit was 6173 + 7176 + 6730 + 5256 = $25,335 Mil.
Total Current Assets was $16,253 Mil.
Total Assets was $118,986 Mil.
Property, Plant and Equipment(Net PPE) was $75,790 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,951 Mil.
Selling, General & Admin. Expense(SGA) was $850 Mil.
Total Current Liabilities was $14,141 Mil.
Long-Term Debt was $19,499 Mil.
Net Income was 2704 + 2081 + 2123 + 2487 = $9,395 Mil.
Non Operating Income was 8 + -7 + -18 + 24 = $7 Mil.
Cash Flow from Operations was 4180 + 3622 + 6336 + 3911 = $18,049 Mil.
Accounts Receivable was $8,191 Mil.
Revenue was 15470 + 14142 + 14651 + 16366 = $60,629 Mil.
Gross Profit was 7800 + 6949 + 6853 + 7150 = $28,752 Mil.
Total Current Assets was $22,557 Mil.
Total Assets was $119,760 Mil.
Property, Plant and Equipment(Net PPE) was $71,129 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,320 Mil.
Selling, General & Admin. Expense(SGA) was $823 Mil.
Total Current Liabilities was $16,335 Mil.
Long-Term Debt was $21,096 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)
=(7255 / 57651) / (8191 / 60629)
=0.12584344 / 0.13510036
=0.9315

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)
=(7176 / 60629) / (6173 / 57651)
=0.4742285 / 0.43945465
=1.0791

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 - (16253 + 75790) / 118986) / (1 - (22557 + 71129) / 119760)
=0.2264384 / 0.21771877
=1.04

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
=57651 / 60629
=0.9509

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))
=(7320 / (7320 + 71129)) / (7951 / (7951 + 75790))
=0.09330903 / 0.09494752
=0.9827

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)
=(850 / 57651) / (823 / 60629)
=0.01474389 / 0.01357436
=1.0862

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)
=((19499 + 14141) / 118986) / ((21096 + 16335) / 119760)
=0.28272234 / 0.3125501
=0.9046

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
=(9395 - 7 - 18049) / 118986
=-0.0728

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 -2.86 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 1.55440.87971.14911.12380.57951.77980.80033.60410.57570.9863
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 -1.72-2.58-2.67-2.64-3.06-2.35-2.68-1.13-3.30-2.78

ConocoPhillips Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.50291.32370.93690.61641.13910.90670.98630.9630.94290.9315
GMI 0.5970.6180.69310.9670.95620.94850.99611.01511.0241.0791
AQI 0.88320.88830.87220.88130.93860.9671.00430.97921.05711.04
SGI 0.34990.41520.57670.92690.95761.00150.93940.98471.00550.9509
DEPI 1.02551.08340.88980.80150.93140.85630.96210.98950.99070.9827
SGAI 1.52681.89011.71841.08120.96720.70910.82190.9360.98681.0862
LVGI 1.00540.94211.00620.92460.9930.99710.940.92990.90750.9046
TATA -0.0593-0.0479-0.0465-0.0581-0.0724-0.0665-0.0592-0.0713-0.069-0.0728
M-score -3.22-3.30-3.49-3.25-2.78-2.88-2.78-2.83-2.78-2.86
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