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Cenovus Energy Inc (NYSE:CVE)
Beneish M-Score
-3.02 (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.

Cenovus Energy Inc has a M-score of -2.87 suggests that the company is not a manipulator.

CVE' s 10-Year Beneish M-Score Range
Min: -3.2   Max: -2.6
Current: -3.02

-3.2
-2.6

During the past 6 years, the highest Beneish M-Score of Cenovus Energy Inc was -2.60. The lowest was -3.20. And the median was -3.02.


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 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 * 1.0936+0.528 * 1.1261+0.404 * 0.3831+0.892 * 1.1284+0.115 * 1.079
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8963+4.679 * -0.0916-0.327 * 1.0113
=-2.87

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,041 Mil.
Revenue was 5176.90875233 + 4654.2311192 + 4412.24862888 + 5014.47876448 = $19,258 Mil.
Gross Profit was 1258.84543762 + 1092.81164695 + 835.466179159 + 1141.89189189 = $4,329 Mil.
Total Current Assets was $4,299 Mil.
Total Assets was $23,393 Mil.
Property, Plant and Equipment(Net PPE) was $18,334 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,708 Mil.
Selling, General & Admin. Expense(SGA) was $368 Mil.
Total Current Liabilities was $3,453 Mil.
Long-Term Debt was $4,672 Mil.
Net Income was 572.625698324 + 224.74977252 + -53.0164533821 + 357.142857143 = $1,102 Mil.
Non Operating Income was 160.148975791 + 101.000909918 + -157.221206581 + -10.6177606178 = $93 Mil.
Cash Flow from Operations was 1032.58845438 + 415.832575068 + 892.138939671 + 810.810810811 = $3,151 Mil.
Accounts Receivable was $1,654 Mil.
Revenue was 4417.30769231 + 4295.38763494 + 3832.66129032 + 4520.77001013 = $17,066 Mil.
Gross Profit was 1063.46153846 + 1135.42688911 + 893.14516129 + 1227.96352584 = $4,320 Mil.
Total Current Assets was $4,546 Mil.
Total Assets was $23,548 Mil.
Property, Plant and Equipment(Net PPE) was $17,006 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,723 Mil.
Selling, General & Admin. Expense(SGA) was $363 Mil.
Total Current Liabilities was $3,330 Mil.
Long-Term Debt was $4,758 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)
=(2040.96834264 / 19257.8672649) / (1653.84615385 / 17066.1266277)
=0.10598102 / 0.09690811
=1.0936

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)
=(1092.81164695 / 17066.1266277) / (1258.84543762 / 19257.8672649)
=0.25313284 / 0.22479203
=1.1261

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 - (4298.88268156 + 18334.264432) / 23392.9236499) / (1 - (4546.15384615 + 17005.7692308) / 23548.0769231)
=0.0324789 / 0.08476929
=0.3831

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
=19257.8672649 / 17066.1266277
=1.1284

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))
=(1722.58201768 / (1722.58201768 + 17005.7692308)) / (1708.46263647 / (1708.46263647 + 18334.264432))
=0.09197724 / 0.08524103
=1.079

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)
=(367.614209542 / 19257.8672649) / (363.450623726 / 17066.1266277)
=0.01908904 / 0.02129661
=0.8963

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)
=((4672.25325885 + 3452.51396648) / 23392.9236499) / ((4757.69230769 + 3329.80769231) / 23548.0769231)
=0.34731731 / 0.3434463
=1.0113

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
=(1101.50187461 - 93.3109185104 - 3151.37077993) / 23392.9236499
=-0.0916

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 -2.87 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.

Cenovus Energy Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98921.2433
GMI 0.98331.0431
AQI 0.65490.3522
SGI 1.0870.9996
DEPI 0.9420.9383
SGAI 1.11450.9045
LVGI 1.05351.0599
TATA -0.0961-0.0984
M-score -3.05-2.97

Cenovus Energy Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.88940.9691.30851.01991.35451.25911.01971.18481.0111.0936
GMI 0.871.04010.99681.00080.95690.86870.96851.02161.09781.1261
AQI 0.61190.65340.58520.65490.64630.6570.71340.35220.37820.3831
SGI 1.29291.18351.15591.05440.97340.98810.9821.0491.09661.1284
DEPI 1.07880.9971.01350.96770.93250.91520.92550.8980.98661.079
SGAI 0.68470.74380.97891.11051.26331.34251.06420.90380.94320.8963
LVGI 0.9080.74881.10791.05350.88571.18151.04331.05991.08161.0113
TATA -0.0616-0.08-0.0909-0.097-0.1183-0.12-0.1049-0.1068-0.0888-0.0916
M-score -2.74-2.71-2.68-3.05-2.91-3.15-3.13-3.03-3.02-2.87
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