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ConocoPhillips (NYSE:COP)
Beneish M-Score
-3.31 (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 -3.31 suggests that the company is not a manipulator.

COP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.5   Max: -0.77
Current: -3.31

-3.5
-0.77

During the past 13 years, the highest Beneish M-Score of ConocoPhillips was -0.77. The lowest was -3.50. And the median was -2.68.


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 * 0.9303+0.528 * 1.278+0.404 * 1.0194+0.892 * 0.6248+0.115 * 0.8525
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5101+4.679 * -0.0949-0.327 * 1.1018
=-3.31

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $4,332 Mil.
Revenue was 7507 + 8660 + 8002 + 11851 = $36,020 Mil.
Gross Profit was 2404 + 3632 + 2963 + 4134 = $13,133 Mil.
Total Current Assets was $9,664 Mil.
Total Assets was $105,949 Mil.
Property, Plant and Equipment(Net PPE) was $71,828 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,002 Mil.
Selling, General & Admin. Expense(SGA) was $802 Mil.
Total Current Liabilities was $8,287 Mil.
Long-Term Debt was $24,716 Mil.
Net Income was -1071 + -179 + 272 + -39 = $-1,017 Mil.
Non Operating Income was 72 + -70 + 0 + 83 = $85 Mil.
Cash Flow from Operations was 1934 + 2172 + 1870 + 2977 = $8,953 Mil.
Accounts Receivable was $7,453 Mil.
Revenue was 12917 + 14701 + 16048 + 13985 = $57,651 Mil.
Gross Profit was 6173 + 7176 + 7026 + 6488 = $26,863 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.



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)
=(4332 / 36020) / (7453 / 57651)
=0.12026652 / 0.1292779
=0.9303

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)
=(3632 / 57651) / (2404 / 36020)
=0.46595896 / 0.364603
=1.278

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 - (9664 + 71828) / 105949) / (1 - (16253 + 75790) / 118986)
=0.23083748 / 0.2264384
=1.0194

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
=36020 / 57651
=0.6248

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))
=(7951 / (7951 + 75790)) / (9002 / (9002 + 71828))
=0.09494752 / 0.11136954
=0.8525

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)
=(802 / 36020) / (850 / 57651)
=0.02226541 / 0.01474389
=1.5101

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)
=((24716 + 8287) / 105949) / ((19499 + 14141) / 118986)
=0.31149893 / 0.28272234
=1.1018

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
=(-1017 - 85 - 8953) / 105949
=-0.0949

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 -3.31 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.14911.12380.57951.77980.80033.60410.57570.98630.8465
GMI 0.86611.01171.16331.05810.98030.59010.90180.99281.1031
AQI 1.06211.1090.741.0670.87961.01310.87221.00431.0061
SGI 1.02811.03171.26570.6191.30360.33260.93850.93940.9531
DEPI 0.92640.91360.87971.01170.96891.31830.84190.96210.9316
SGAI 1.10710.97020.85040.8290.84051.29721.36240.82190.903
LVGI 1.00120.8831.28890.97280.96281.0121.00620.940.9492
TATA -0.0601-0.0818-0.0695-0.0696-0.0364-0.0469-0.0465-0.0592-0.0852
M-score -2.67-2.64-3.06-2.33-2.59-1.13-3.33-2.78-2.98

ConocoPhillips Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.90670.98630.9630.9690.95690.84650.8010.91730.9303
GMI 0.90151.00261.01251.0221.07081.09241.10021.161.278
AQI 0.9671.00430.97921.05711.041.00611.06441.01811.0194
SGI 1.00150.93940.98471.00550.95090.95310.79590.68820.6248
DEPI 0.8040.96210.98950.99070.98270.93160.8910.87910.8525
SGAI 0.70910.82190.9360.98681.08620.9031.02711.15471.5101
LVGI 0.99710.940.92990.90750.90460.94920.94981.01811.1018
TATA -0.0665-0.0592-0.0713-0.0683-0.0694-0.0851-0.0665-0.0728-0.0949
M-score -2.91-2.77-2.83-2.76-2.82-2.98-3.08-3.13-3.31
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