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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.
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 -2.40.
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|
|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
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)|
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)|
|=||(-10.302 / 645.046)||/||(-4.597 / 390.604)|
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 - (309.664 + 573.761) / 913.348)||/||(1 - (310.765 + 567.098) / 909.517)|
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))|
|=||(49.385 / (49.385 + 567.098))||/||(54.694 / (54.694 + 573.761))|
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)|
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)|
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|
|=||(-59.105 - -1.122||-||77.127)||/||913.348|
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.
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
Carbo Ceramics Inc Annual Data
Carbo Ceramics Inc Quarterly Data