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ConocoPhillips (NYSE:COP)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

COP' s 10-Year Beneish M-Score Range
Min: -3.52   Max: -0.87
Current: -2.77

-3.52
-0.87

During the past 13 years, the highest Beneish M-Score of ConocoPhillips was -0.87. The lowest was -3.52. And the median was -2.59.


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 * 0.9575+0.528 * 0.9967+0.404 * 1.0571+0.892 * 1.0176+0.115 * 1.0282
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9761+4.679 * -0.069-0.327 * 0.9075
=-2.77

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $8,204 Mil.
Revenue was 14701 + 16048 + 13985 + 15470 = $60,204 Mil.
Gross Profit was 7176 + 6730 + 6167 + 7487 = $27,560 Mil.
Total Current Assets was $18,836 Mil.
Total Assets was $121,648 Mil.
Property, Plant and Equipment(Net PPE) was $75,424 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,757 Mil.
Selling, General & Admin. Expense(SGA) was $896 Mil.
Total Current Liabilities was $16,191 Mil.
Long-Term Debt was $19,570 Mil.
Net Income was 2081 + 2123 + 2487 + 2480 = $9,171 Mil.
Non Operating Income was -7 + -18 + 24 + -9 = $-10 Mil.
Cash Flow from Operations was 3622 + 6336 + 3911 + 3705 = $17,574 Mil.
Accounts Receivable was $8,420 Mil.
Revenue was 14142 + 14651 + 15279 + 15089 = $59,161 Mil.
Gross Profit was 6949 + 6853 + 6468 + 6723 = $26,993 Mil.
Total Current Assets was $22,602 Mil.
Total Assets was $116,947 Mil.
Property, Plant and Equipment(Net PPE) was $69,438 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,364 Mil.
Selling, General & Admin. Expense(SGA) was $902 Mil.
Total Current Liabilities was $16,715 Mil.
Long-Term Debt was $21,167 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)
=(8204 / 60204) / (8420 / 59161)
=0.13627002 / 0.14232349
=0.9575

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)
=(6730 / 59161) / (7176 / 60204)
=0.45626342 / 0.45777689
=0.9967

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 - (18836 + 75424) / 121648) / (1 - (22602 + 69438) / 116947)
=0.22514139 / 0.21297682
=1.0571

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
=60204 / 59161
=1.0176

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))
=(7364 / (7364 + 69438)) / (7757 / (7757 + 75424))
=0.09588292 / 0.09325447
=1.0282

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)
=(896 / 60204) / (902 / 59161)
=0.01488273 / 0.01524653
=0.9761

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)
=((19570 + 16191) / 121648) / ((21167 + 16715) / 116947)
=0.29397113 / 0.32392451
=0.9075

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
=(9171 - -10 - 17574) / 121648
=-0.069

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 -2.77 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 1.17161.01451.29270.99890.57951.77450.92060.82642.25120.9839
GMI 0.64841.0521.20160.71951.16331.0180.99641.21090.47310.986
AQI 1.00351.05411.06211.1090.741.07490.87311.01310.87221.0043
SGI 1.49871.33920.91391.16061.26570.62081.29981.26460.24680.9394
DEPI 0.98580.96190.92640.91360.87971.01170.96891.14820.91691.0142
SGAI 0.55440.72981.20571.15290.85040.82660.84290.81952.15650.8219
LVGI 0.87640.93051.00120.8831.28890.96990.96571.0121.00620.94
TATA -0.0597-0.0715-0.0601-0.0818-0.0695-0.0499-0.0564-0.0737-0.0469-0.0592
M-score -2.23-2.38-2.48-2.82-3.06-2.26-2.57-2.59-2.76-2.78

ConocoPhillips Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.89510.52480.89671.34362.12543.67912.32111.64850.9810.9575
GMI 1.16190.95090.78880.65460.47870.53180.59490.70420.99960.9967
AQI 0.97990.88320.88830.87220.88130.93860.9671.00430.97921.0571
SGI 1.19040.87530.62380.41350.23950.29650.39430.56070.9911.0176
DEPI 1.15261.03061.01410.91690.89010.93790.96051.01421.00621.0282
SGAI 0.92331.06171.40541.70371.74121.53261.1261.04040.9310.9761
LVGI 1.0931.00540.94211.00620.92460.9930.99710.940.92990.9075
TATA -0.0848-0.0865-0.0632-0.0575-0.0585-0.0728-0.0668-0.0592-0.0713-0.069
M-score -2.73-3.52-3.41-3.32-2.84-1.35-2.37-2.69-2.81-2.77
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