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GuruFocus has detected 5 Warning Signs with Carrizo Oil & Gas Inc $CRZO.
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Carrizo Oil & Gas Inc (NAS:CRZO)
Beneish M-Score
-3.64 (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.

Carrizo Oil & Gas Inc has a M-score of -3.64 suggests that the company is not a manipulator.

CRZO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.72   Max: -0.19
Current: -3.64

-3.72
-0.19

During the past 13 years, the highest Beneish M-Score of Carrizo Oil & Gas Inc was -0.19. The lowest was -3.72. And the median was -2.89.


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 Carrizo Oil & Gas 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 * 1.1353+0.528 * 1.0075+0.404 * 0.1607+0.892 * 1.0335+0.115 * 1.2235
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0791+4.679 * -0.1939-0.327 * 1.2471
=-3.64

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $64.2 Mil.
Revenue was 143.831 + 111.177 + 107.324 + 81.262 = $443.6 Mil.
Gross Profit was 108.47 + 80.583 + 79.133 + 52.086 = $320.3 Mil.
Total Current Assets was $73.0 Mil.
Total Assets was $1,626.3 Mil.
Property, Plant and Equipment(Net PPE) was $1,545.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $214.0 Mil.
Selling, General & Admin. Expense(SGA) was $75.0 Mil.
Total Current Liabilities was $212.0 Mil.
Long-Term Debt was $1,325.4 Mil.
Net Income was -0.779 + -101.174 + -262.126 + -311.395 = $-675.5 Mil.
Non Operating Income was -24.928 + -93.812 + -250.467 + -263.767 = $-633.0 Mil.
Cash Flow from Operations was 74.921 + 71.808 + 72.171 + 53.868 = $272.8 Mil.
Accounts Receivable was $54.7 Mil.
Revenue was 99.422 + 106.237 + 123.494 + 100.05 = $429.2 Mil.
Gross Profit was 70.061 + 77.504 + 93.365 + 71.283 = $312.2 Mil.
Total Current Assets was $232.2 Mil.
Total Assets was $2,007.2 Mil.
Property, Plant and Equipment(Net PPE) was $1,716.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $300.0 Mil.
Selling, General & Admin. Expense(SGA) was $67.2 Mil.
Total Current Liabilities was $285.5 Mil.
Long-Term Debt was $1,236.0 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)
=(64.208 / 443.594) / (54.721 / 429.203)
=0.14474497 / 0.12749445
=1.1353

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)
=(312.213 / 429.203) / (320.272 / 443.594)
=0.72742502 / 0.72199353
=1.0075

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 - (72.988 + 1545.76) / 1626.327) / (1 - (232.182 + 1716.861) / 2007.246)
=0.00466019 / 0.02899645
=0.1607

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
=443.594 / 429.203
=1.0335

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))
=(300.035 / (300.035 + 1716.861)) / (213.962 / (213.962 + 1545.76))
=0.14876077 / 0.12158852
=1.2235

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)
=(74.972 / 443.594) / (67.224 / 429.203)
=0.1690104 / 0.15662519
=1.0791

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)
=((1325.418 + 211.959) / 1626.327) / ((1236.017 + 285.484) / 2007.246)
=0.9453062 / 0.75800425
=1.2471

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
=(-675.474 - -632.974 - 272.768) / 1626.327
=-0.1939

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.

Carrizo Oil & Gas Inc has a M-score of -3.64 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 local exchange's currency.

Carrizo Oil & Gas Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.67320.47171.8891.19571.21131.13090.69760.61220.97421.1353
GMI 0.99751.01151.10070.93120.95280.95620.99521.01551.15761.0075
AQI 1.70420.93954.05980.80841.23680.91450.1751.41661.17460.1607
SGI 1.51651.72250.52651.21081.46371.82121.41281.36530.60441.0335
DEPI 1.07371.09020.84311.44970.71530.63590.94080.99050.72411.2235
SGAI 0.80950.72382.42750.98410.79040.64391.12610.72811.4441.0791
LVGI 0.97881.13381.26950.84721.08711.04510.86181.02781.27281.2471
TATA -0.1108-0.2105-0.4375-0.0887-0.1082-0.1212-0.123-0.1593-0.176-0.1939
M-score -2.51-3.31-3.19-2.54-2.33-2.25-3.28-3.04-3.72-3.64

Carrizo Oil & Gas Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.72440.61220.57790.64680.69530.97421.08971.01971.06251.1353
GMI 1.00331.01551.05581.09171.13171.15761.14161.11471.071.0075
AQI 1.01911.41661.31231.53241.97421.17460.26650.37890.17820.1607
SGI 1.3591.36531.15480.93330.72870.60440.62850.67620.80961.0335
DEPI 0.81670.99051.00851.06040.84880.72410.65940.64260.93131.2235
SGAI 1.00330.72810.77670.77331.02141.4441.12781.18461.32751.0791
LVGI 0.88191.02780.92040.92851.29541.27281.64791.8491.48851.2471
TATA -0.1735-0.1593-0.1684-0.1788-0.1764-0.176-0.2065-0.2322-0.2667-0.1939
M-score -3.20-3.04-3.30-3.37-3.48-3.72-4.19-4.38-4.36-3.64
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