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GuruFocus has detected 6 Warning Signs with CSX Corp $CSX.
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CSX Corp (NAS:CSX)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

CSX' s Beneish M-Score Range Over the Past 10 Years
Min: -39.27   Max: 19.71
Current: -2.68

-39.27
19.71

During the past 13 years, the highest Beneish M-Score of CSX Corp was 19.71. The lowest was -39.27. And the median was -2.67.


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 * 1.0358+0.528 * 0.974+0.404 * 1.0168+0.892 * 0.9928+0.115 * 0.9685
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.99+4.679 * -0.0429-0.327 * 1.0511
=-2.68

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $943 Mil.
Revenue was 2869 + 3037 + 2710 + 2704 = $11,320 Mil.
Gross Profit was 1994 + 2204 + 1924 + 1908 = $8,030 Mil.
Total Current Assets was $2,660 Mil.
Total Assets was $35,712 Mil.
Property, Plant and Equipment(Net PPE) was $31,259 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,308 Mil.
Selling, General & Admin. Expense(SGA) was $3,152 Mil.
Total Current Liabilities was $2,277 Mil.
Long-Term Debt was $10,963 Mil.
Net Income was 362 + 458 + 455 + 445 = $1,720 Mil.
Non Operating Income was 7 + -107 + 13 + 8 = $-79 Mil.
Cash Flow from Operations was 1043 + 553 + 896 + 838 = $3,330 Mil.
Accounts Receivable was $917 Mil.
Revenue was 2618 + 2781 + 2939 + 3064 = $11,402 Mil.
Gross Profit was 1813 + 1902 + 2022 + 2141 = $7,878 Mil.
Total Current Assets was $2,608 Mil.
Total Assets was $34,610 Mil.
Property, Plant and Equipment(Net PPE) was $30,293 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,226 Mil.
Selling, General & Admin. Expense(SGA) was $3,207 Mil.
Total Current Liabilities was $1,692 Mil.
Long-Term Debt was $10,516 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)
=(943 / 11320) / (917 / 11402)
=0.08330389 / 0.08042449
=1.0358

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)
=(7878 / 11402) / (8030 / 11320)
=0.69093142 / 0.70936396
=0.974

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 - (2660 + 31259) / 35712) / (1 - (2608 + 30293) / 34610)
=0.05020721 / 0.04937879
=1.0168

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
=11320 / 11402
=0.9928

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))
=(1226 / (1226 + 30293)) / (1308 / (1308 + 31259))
=0.03889717 / 0.04016336
=0.9685

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)
=(3152 / 11320) / (3207 / 11402)
=0.27844523 / 0.28126644
=0.99

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)
=((10963 + 2277) / 35712) / ((10516 + 1692) / 34610)
=0.37074373 / 0.35273042
=1.0511

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
=(1720 - -79 - 3330) / 35712
=-0.0429

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 -2.68 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.

CSX Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.95370.84031.11890.84830.90811.1170.92371.01870.9331.0192
GMI 0.82850.98290.90951.0061.13910.99410.99960.99830.93910.965
AQI 0.81030.92981.00771.14021.00871.05041.06170.96560.86811.0072
SGI 1.04851.12210.80331.17641.1090.99731.02241.05350.93230.9372
DEPI 1.01351.00951.03310.98371.01750.96281.00471.00441.00560.9601
SGAI 0.81090.88191.10750.95610.93710.98541.01631.02151.0451.0245
LVGI 1.1411.05370.9571.04221.02280.98940.94590.97621.02061.0232
TATA -0.0369-0.0536-0.0344-0.0607-0.0564-0.0375-0.0442-0.042-0.043-0.0352
M-score -2.83-2.80-2.75-2.69-2.65-2.53-2.70-2.62-2.90-2.72

CSX Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.01870.97860.94460.91410.9330.92481.01051.04241.01921.0358
GMI 0.99830.96360.94140.93670.93910.94960.96680.97060.9650.974
AQI 0.96560.92260.9170.92130.86810.89380.90240.90761.00721.0168
SGI 1.05351.05041.01880.97710.93230.89890.88310.88470.93720.9928
DEPI 1.00441.00821.01371.01871.00560.99550.98730.97480.96010.9685
SGAI 1.02151.02881.05511.06381.0451.03651.02531.03261.02450.99
LVGI 0.97620.98241.00390.99141.02061.01261.00250.99231.02321.0511
TATA -0.042-0.0431-0.0434-0.0462-0.043-0.0476-0.0494-0.0501-0.0352-0.0429
M-score -2.62-2.71-2.79-2.87-2.90-2.94-2.87-2.84-2.72-2.68
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