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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 7 years, the highest Beneish M-Score of Cenovus Energy Inc was 0.31. The lowest was -3.43. And the median was -2.84.
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 Cenovus Energy 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 * 0.6355||+||0.528 * 1.2096||+||0.404 * 0.3675||+||0.892 * 0.8609||+||0.115 * 0.9395|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9269||+||4.679 * -0.1176||-||0.327 * 0.881|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $1,083 Mil.|
Revenue was 2508.32144555 + 3761.70655567 + 4626.2828081 + 5133.88734995 = $16,030 Mil.
Gross Profit was 317.007449675 + 338.189386056 + 1048.95104895 + 1248.38411819 = $2,953 Mil.
Total Current Assets was $3,785 Mil.
Total Assets was $20,487 Mil.
Property, Plant and Equipment(Net PPE) was $16,455 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,736 Mil.
Selling, General & Admin. Expense(SGA) was $282 Mil.
Total Current Liabilities was $1,923 Mil.
Long-Term Debt was $4,734 Mil.
Net Income was -529.402440957 + -409.295872355 + 321.496685133 + 567.867036011 = $-49 Mil.
Non Operating Income was -433.507687431 + -203.780783906 + -147.125601671 + 158.818097876 = $-626 Mil.
Cash Flow from Operations was 217.942621652 + 752.688172043 + 991.73553719 + 1024.00738689 = $2,986 Mil.
|Accounts Receivable was $1,980 Mil.
Revenue was 4603.96039604 + 4536.65413534 + 5024.17794971 + 4455.86808923 = $18,621 Mil.
Gross Profit was 1081.00810081 + 845.864661654 + 1148.93617021 + 1072.74490786 = $4,149 Mil.
Total Current Assets was $4,193 Mil.
Total Assets was $22,492 Mil.
Property, Plant and Equipment(Net PPE) was $17,563 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,730 Mil.
Selling, General & Admin. Expense(SGA) was $353 Mil.
Total Current Liabilities was $3,618 Mil.
Long-Term Debt was $4,677 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)|
|=||(1083.37295926 / 16030.1981593)||/||(1980.1980198 / 18620.6605703)|
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)|
|=||(338.189386056 / 18620.6605703)||/||(317.007449675 / 16030.1981593)|
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 - (3785.06894912 + 16455.064194) / 20486.6064353)||/||(1 - (4192.61926193 + 17563.4563456) / 22492.3492349)|
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))|
|=||(1729.91863344 / (1729.91863344 + 17563.4563456))||/||(1736.0649075 / (1736.0649075 + 16455.064194))|
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)|
|=||(281.997986755 / 16030.1981593)||/||(353.385215924 / 18620.6605703)|
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)|
|=||((4733.71374227 + 1922.65018228) / 20486.6064353)||/||((4676.86768677 + 3618.36183618) / 22492.3492349)|
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|
|=||(-49.3345921684 - -625.595975131||-||2986.37371777)||/||20486.6064353|
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.
Cenovus Energy Inc has a M-score of -3.59 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
Cenovus Energy Inc Annual Data
Cenovus Energy Inc Quarterly Data