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Carbo Ceramics Inc (NYSE:CRR)
Beneish M-Score
268.41 (As of Today)

Warning Sign:

Beneish M-Score 268.41 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Carbo Ceramics Inc has a M-score of 268.41 signals that the company is a manipulator.

CRR' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 268.41
Current: 268.41

-10000000
268.41

During the past 13 years, the highest Beneish M-Score of Carbo Ceramics Inc was 268.41. The lowest was -10000000.00. And the median was -2.44.


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 Carbo Ceramics Inc 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 * 0.879+0.528 * 516.9873+0.404 * 0.9413+0.892 * 0.6055+0.115 * 0.9205
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.476+4.679 * -0.1479-0.327 * 1.8486
=268.41

* 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 $60.1 Mil.
Revenue was 75.807 + 73.252 + 73.747 + 167.798 = $390.6 Mil.
Gross Profit was -4.597 + -10.302 + -25.998 + 41.118 = $0.2 Mil.
Total Current Assets was $309.7 Mil.
Total Assets was $913.3 Mil.
Property, Plant and Equipment(Net PPE) was $573.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.7 Mil.
Selling, General & Admin. Expense(SGA) was $64.3 Mil.
Total Current Liabilities was $128.1 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -13.898 + -17.004 + -28.602 + 0.399 = $-59.1 Mil.
Non Operating Income was -0.064 + -0.004 + -0.131 + -0.923 = $-1.1 Mil.
Cash Flow from Operations was 8.679 + 6.335 + 53.115 + 8.998 = $77.1 Mil.
Accounts Receivable was $112.8 Mil.
Revenue was 155.402 + 176.561 + 148.564 + 164.519 = $645.0 Mil.
Gross Profit was 42.15 + 53.648 + 44.364 + 48.518 = $188.7 Mil.
Total Current Assets was $310.8 Mil.
Total Assets was $909.5 Mil.
Property, Plant and Equipment(Net PPE) was $567.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $49.4 Mil.
Selling, General & Admin. Expense(SGA) was $72.0 Mil.
Total Current Liabilities was $69.0 Mil.
Long-Term Debt was $0.0 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)
=(60.053 / 390.604) / (112.825 / 645.046)
=0.15374395 / 0.17491001
=0.879

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)
=(-10.302 / 645.046) / (-4.597 / 390.604)
=0.29250627 / 0.00056579
=516.9873

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 - (309.664 + 573.761) / 913.348) / (1 - (310.765 + 567.098) / 909.517)
=0.03276188 / 0.03480309
=0.9413

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
=390.604 / 645.046
=0.6055

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))
=(49.385 / (49.385 + 567.098)) / (54.694 / (54.694 + 573.761))
=0.08010764 / 0.0870293
=0.9205

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)
=(64.314 / 390.604) / (71.957 / 645.046)
=0.16465269 / 0.11155328
=1.476

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)
=((0 + 128.085) / 913.348) / ((0 + 68.997) / 909.517)
=0.1402368 / 0.07586114
=1.8486

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
=(-59.105 - -1.122 - 77.127) / 913.348
=-0.1479

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.

Carbo Ceramics Inc has a M-score of 268.41 signals that the company is likely to 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.

Carbo Ceramics Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.04780.76560.991.02821.08620.94590.89351.17261.0902
GMI 1.06711.07781.0340.93220.95470.88271.20811.19731.0342
AQI 0.91010.2260.97842.92820.84241.57630.65680.81640.9041
SGI 1.12331.0571.29280.88151.38381.32261.03171.03390.9714
DEPI 1.11650.86750.79681.0851.11260.90120.88171.05581.0994
SGAI 0.82621.08640.99261.19720.94730.88230.99311.03281.1031
LVGI 0.82930.86742.08850.41231.3521.24860.58881.02631.2848
TATA 0.02870.00930.05440.0601-0.02110.0257-0.0619-0.0598-0.0531
M-score -2.09-2.86-2.34-1.37-2.34-2.02-2.75-2.55-2.79

Carbo Ceramics Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.3151.17260.92541.05050.73541.09020.74810.77150.8790
GMI 1.28941.19731.10130.9670.991.03421.50853.0316516.987-1.3928
AQI 0.62860.81640.89760.85780.99040.90411.1121.08180.94130.5323
SGI 1.00991.03391.06081.14020.98260.97140.85820.68030.60550.4312
DEPI 0.99621.05581.13341.20161.1691.09941.03640.9360.92051.1615
SGAI 1.01671.03221.00121.01131.10511.10091.23941.37541.4761.9918
LVGI 1.10211.02631.0711.32970.9921.28481.70872.23381.84861.7989
TATA -0.0523-0.0591-0.0887-0.0726-0.0953-0.0531-0.1122-0.1463-0.1479-0.2108
M-score -2.46-2.55-2.91-2.81-3.19-2.79-3.32-3.03268.41-6.76
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