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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 -1.33. 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 * 0.7481||+||0.528 * 1.5085||+||0.404 * 1.112||+||0.892 * 0.8582||+||0.115 * 1.0364|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2394||+||4.679 * -0.1118||-||0.327 * 1.7087|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $68.7 Mil.|
Revenue was 73.747 + 167.798 + 155.402 + 176.561 = $573.5 Mil.
Gross Profit was -25.998 + 41.118 + 42.15 + 53.648 = $110.9 Mil.
Total Current Assets was $327.6 Mil.
Total Assets was $939.5 Mil.
Property, Plant and Equipment(Net PPE) was $575.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.1 Mil.
Selling, General & Admin. Expense(SGA) was $72.7 Mil.
Total Current Liabilities was $115.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -28.602 + 0.399 + 13.744 + 23.017 = $8.6 Mil.
Non Operating Income was -0.131 + -0.923 + 0.048 + -0.2 = $-1.2 Mil.
Cash Flow from Operations was 53.115 + 8.998 + 39.28 + 13.395 = $114.8 Mil.
|Accounts Receivable was $107.0 Mil.
Revenue was 148.564 + 164.519 + 201.477 + 153.744 = $668.3 Mil.
Gross Profit was 44.364 + 48.518 + 62.759 + 39.333 = $195.0 Mil.
Total Current Assets was $348.3 Mil.
Total Assets was $882.7 Mil.
Property, Plant and Equipment(Net PPE) was $503.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.4 Mil.
Selling, General & Admin. Expense(SGA) was $68.4 Mil.
Total Current Liabilities was $63.2 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)|
|=||(68.713 / 573.508)||/||(107.036 / 668.304)|
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)|
|=||(41.118 / 668.304)||/||(-25.998 / 573.508)|
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 - (327.585 + 575.478) / 939.513)||/||(1 - (348.311 + 503.619) / 882.727)|
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))|
|=||(47.367 / (47.367 + 503.619))||/||(52.051 / (52.051 + 575.478))|
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)|
|=||(72.716 / 573.508)||/||(68.366 / 668.304)|
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 + 114.958) / 939.513)||/||((0 + 63.213) / 882.727)|
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|
|=||(8.558 - -1.206||-||114.788)||/||939.513|
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 -3.32 suggests that the company will not 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