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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 Carrizo Oil & Gas Inc was 1.52. The lowest was -5.78. And the median was -2.76.
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 * 1.0897||+||0.528 * 1.1416||+||0.404 * 0.2665||+||0.892 * 0.6285||+||0.115 * 0.6594|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1278||+||4.679 * -0.2324||-||0.327 * 1.6479|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $56.6 Mil.|
Revenue was 81.262 + 99.422 + 106.237 + 123.494 = $410.4 Mil.
Gross Profit was 52.086 + 70.061 + 77.504 + 93.365 = $293.0 Mil.
Total Current Assets was $158.6 Mil.
Total Assets was $1,650.9 Mil.
Property, Plant and Equipment(Net PPE) was $1,483.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $285.7 Mil.
Selling, General & Admin. Expense(SGA) was $57.0 Mil.
Total Current Liabilities was $191.6 Mil.
Long-Term Debt was $1,267.2 Mil.
Net Income was -311.395 + -380.165 + -707.647 + -46.132 = $-1,445.3 Mil.
Non Operating Income was -263.767 + -355.437 + -787.516 + -12.876 = $-1,419.6 Mil.
Cash Flow from Operations was 53.868 + 94.395 + 118.54 + 91.166 = $358.0 Mil.
|Accounts Receivable was $82.6 Mil.
Revenue was 100.05 + 163.275 + 196.225 + 193.475 = $653.0 Mil.
Gross Profit was 71.283 + 130.361 + 164.578 + 166.009 = $532.2 Mil.
Total Current Assets was $249.4 Mil.
Total Assets was $3,051.2 Mil.
Property, Plant and Equipment(Net PPE) was $2,740.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $326.7 Mil.
Selling, General & Admin. Expense(SGA) was $80.3 Mil.
Total Current Liabilities was $384.5 Mil.
Long-Term Debt was $1,251.6 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)|
|=||(56.557 / 410.415)||/||(82.585 / 653.025)|
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)|
|=||(532.231 / 653.025)||/||(293.016 / 410.415)|
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 - (158.555 + 1483.588) / 1650.932)||/||(1 - (249.429 + 2740.852) / 3051.231)|
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))|
|=||(326.66 / (326.66 + 2740.852))||/||(285.741 / (285.741 + 1483.588))|
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)|
|=||(56.95 / 410.415)||/||(80.345 / 653.025)|
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)|
|=||((1267.151 + 191.626) / 1650.932)||/||((1251.587 + 384.484) / 3051.231)|
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|
|=||(-1445.339 - -1419.596||-||357.969)||/||1650.932|
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 -4.31 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
Carrizo Oil & Gas Inc Annual Data
Carrizo Oil & Gas Inc Quarterly Data