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CSX Corp (NYSE:CSX)
Beneish M-Score
-2.50 (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.

CSX Corp has a M-score of -2.50 suggests that the company is not a manipulator.

CSX' s 10-Year Beneish M-Score Range
Min: -4.35   Max: -1.14
Current: -2.5

-4.35
-1.14

During the past 13 years, the highest Beneish M-Score of CSX Corp was -1.14. The lowest was -4.35. And the median was -2.62.


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 CSX Corp 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 * 1.0927+0.528 * 1.0173+0.404 * 1.0308+0.892 * 1.0476+0.115 * 0.9954
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0145+4.679 * -0.0364-0.327 * 0.9983
=-2.50

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,123 Mil.
Revenue was 3221 + 3244 + 3012 + 3000 = $12,477 Mil.
Gross Profit was 2112 + 2093 + 1836 + 1865 = $7,906 Mil.
Total Current Assets was $2,676 Mil.
Total Assets was $32,623 Mil.
Property, Plant and Equipment(Net PPE) was $27,994 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,142 Mil.
Selling, General & Admin. Expense(SGA) was $3,687 Mil.
Total Current Liabilities was $2,231 Mil.
Long-Term Debt was $9,387 Mil.
Net Income was 509 + 529 + 398 + 407 = $1,843 Mil.
Non Operating Income was -26 + -12 + 7 + -8 = $-39 Mil.
Cash Flow from Operations was 857 + 846 + 599 + 768 = $3,070 Mil.
Accounts Receivable was $981 Mil.
Revenue was 2999 + 3069 + 2958 + 2884 = $11,910 Mil.
Gross Profit was 1922 + 2016 + 1912 + 1827 = $7,677 Mil.
Total Current Assets was $2,200 Mil.
Total Assets was $30,943 Mil.
Property, Plant and Equipment(Net PPE) was $26,946 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,094 Mil.
Selling, General & Admin. Expense(SGA) was $3,469 Mil.
Total Current Liabilities was $2,251 Mil.
Long-Term Debt was $8,787 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)
=(1123 / 12477) / (981 / 11910)
=0.09000561 / 0.08236776
=1.0927

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)
=(2093 / 11910) / (2112 / 12477)
=0.64458438 / 0.63364591
=1.0173

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 - (2676 + 27994) / 32623) / (1 - (2200 + 26946) / 30943)
=0.05986574 / 0.05807452
=1.0308

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
=12477 / 11910
=1.0476

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))
=(1094 / (1094 + 26946)) / (1142 / (1142 + 27994))
=0.03901569 / 0.0391955
=0.9954

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)
=(3687 / 12477) / (3469 / 11910)
=0.29550373 / 0.29126784
=1.0145

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)
=((9387 + 2231) / 32623) / ((8787 + 2251) / 30943)
=0.35612911 / 0.35672042
=0.9983

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
=(1843 - -39 - 3070) / 32623
=-0.0364

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.

CSX Corp has a M-score of -2.50 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 own currency.

CSX Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.9550.97860.87990.95370.84031.11890.84831.02980.85111.069
GMI 0.97781.05740.89210.92170.98290.90951.05721.03411.04230.9992
AQI 0.23821.04390.87170.81030.92981.00771.14021.00421.06021.0564
SGI 1.02911.07461.111.04851.12210.80331.17641.10411.00111.023
DEPI 1.2670.890.99711.01351.00951.03310.98371.01750.96281.0047
SGAI 2.71941.15160.76760.9720.88191.10751.0770.93860.98731.0079
LVGI 0.92950.85730.94181.1411.05370.9571.04221.02990.98590.9427
TATA -0.08340.0052-0.0335-0.0369-0.0536-0.0344-0.0607-0.0572-0.0378-0.0442
M-score -3.45-2.35-2.70-2.81-2.80-2.75-2.69-2.60-2.74-2.56

CSX Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.97170.99460.85110.85150.83890.83731.0691.06921.08141.0927
GMI 1.04971.05871.01681.01221.01081.00470.99921.01831.02671.0173
AQI 1.00110.99071.06021.04741.08391.0831.05641.05811.03311.0308
SGI 1.05141.01851.00110.98730.99271.00741.0231.02831.03811.0476
DEPI 1.02751.03270.96280.96690.96450.97371.00471.00361.00110.9954
SGAI 0.90940.90370.98730.99821.00441.00281.00791.01931.01571.0145
LVGI 1.01420.99220.98590.96310.96440.94670.94270.9580.96390.9983
TATA -0.0451-0.0453-0.0378-0.0467-0.0457-0.0423-0.0442-0.0425-0.0415-0.0364
M-score -2.63-2.63-2.76-2.81-2.80-2.77-2.56-2.55-2.53-2.50
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