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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 8 years, the highest Beneish M-Score of Cenovus Energy Inc was 10.49. The lowest was -3.96. And the median was -2.87.
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 * 1.3187||+||0.528 * 1.6183||+||0.404 * 1.1094||+||0.892 * 0.5875||+||0.115 * 0.8948|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3917||+||4.679 * -0.0915||-||0.327 * 1.0006|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $839 Mil.|
Revenue was 1712.53591411 + 2154.88952089 + 2493.59264285 + 3056.20703599 = $9,417 Mil.
Gross Profit was -15.1217299259 + 91.8836140888 + 286.446555103 + 714.921148403 = $1,078 Mil.
Total Current Assets was $4,561 Mil.
Total Assets was $18,524 Mil.
Property, Plant and Equipment(Net PPE) was $13,715 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,638 Mil.
Selling, General & Admin. Expense(SGA) was $245 Mil.
Total Current Liabilities was $1,400 Mil.
Long-Term Debt was $4,622 Mil.
Net Income was -89.2182065628 + -467.439655801 + 1357.60590984 + 101.900525677 = $903 Mil.
Non Operating Income was 275.971571148 + -248.669146066 + 1475.19975878 + 43.6716538617 = $1,546 Mil.
Cash Flow from Operations was 137.607742326 + 234.813680449 + 408.563244384 + 270.926000809 = $1,052 Mil.
|Accounts Receivable was $1,083 Mil.
Revenue was 2508.32144555 + 3761.70655567 + 4626.2828081 + 5133.88734995 = $16,030 Mil.
Gross Profit was 316.214931051 + 356.399583767 + 1048.95104895 + 1248.38411819 = $2,970 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 $299 Mil.
Total Current Liabilities was $1,923 Mil.
Long-Term Debt was $4,734 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)|
|=||(839.256010888 / 9417.22511384)||/||(1083.37295926 / 16030.1981593)|
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)|
|=||(2969.94968196 / 16030.1981593)||/||(1078.12958767 / 9417.22511384)|
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 - (4561.46983215 + 13715.4090428) / 18524.1191592)||/||(1 - (3785.06894912 + 16455.064194) / 20486.6064353)|
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))|
|=||(1736.0649075 / (1736.0649075 + 16455.064194))||/||(1637.53402957 / (1637.53402957 + 13715.4090428))|
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)|
|=||(244.800328953 / 9417.22511384)||/||(299.415665842 / 16030.1981593)|
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)|
|=||((4621.95675185 + 1400.27219114) / 18524.1191592)||/||((4733.71374227 + 1922.65018228) / 20486.6064353)|
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|
|=||(902.848573158 - 1546.17383773||-||1051.91066797)||/||18524.1191592|
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 -2.69 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