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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 -2.60. The lowest was -3.43. 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 * 0.7505||+||0.528 * 1.2924||+||0.404 * 0.3878||+||0.892 * 0.723||+||0.115 * 0.8947|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9277||+||4.679 * -0.0986||-||0.327 * 0.9393|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $1,098 Mil.|
Revenue was 3056.20703599 + 2508.32144555 + 3761.70655567 + 4626.2828081 = $13,953 Mil.
Gross Profit was 714.921148403 + 317.007449675 + 338.189386056 + 1048.95104895 = $2,419 Mil.
Total Current Assets was $4,340 Mil.
Total Assets was $20,353 Mil.
Property, Plant and Equipment(Net PPE) was $15,757 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,678 Mil.
Selling, General & Admin. Expense(SGA) was $247 Mil.
Total Current Liabilities was $1,888 Mil.
Long-Term Debt was $4,751 Mil.
Net Income was 101.900525677 + -529.402440957 + -409.295872355 + 321.496685133 = $-515 Mil.
Non Operating Income was 43.6716538617 + -433.507687431 + -203.780783906 + -147.125601671 = $-741 Mil.
Cash Flow from Operations was 270.926000809 + 217.942621652 + 752.688172043 + 991.73553719 = $2,233 Mil.
|Accounts Receivable was $2,024 Mil.
Revenue was 5133.88734995 + 4603.96039604 + 4536.65413534 + 5024.17794971 = $19,299 Mil.
Gross Profit was 1248.38411819 + 1081.00810081 + 845.864661654 + 1148.93617021 = $4,324 Mil.
Total Current Assets was $4,263 Mil.
Total Assets was $23,199 Mil.
Property, Plant and Equipment(Net PPE) was $18,182 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,713 Mil.
Selling, General & Admin. Expense(SGA) was $368 Mil.
Total Current Liabilities was $3,424 Mil.
Long-Term Debt was $4,633 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)|
|=||(1098.26122119 / 13952.5178453)||/||(2024.00738689 / 19298.679831)|
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)|
|=||(317.007449675 / 19298.679831)||/||(714.921148403 / 13952.5178453)|
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 - (4340.47715326 + 15756.5709664) / 20353.4169025)||/||(1 - (4263.15789474 + 18181.9021237) / 23198.5226223)|
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))|
|=||(1713.10468576 / (1713.10468576 + 18181.9021237))||/||(1677.93012666 / (1677.93012666 + 15756.5709664))|
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)|
|=||(246.852767417 / 13952.5178453)||/||(368.033608819 / 19298.679831)|
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)|
|=||((4751.31419329 + 1888.39466235) / 20353.4169025)||/||((4633.42566944 + 3423.82271468) / 23198.5226223)|
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|
|=||(-515.301102502 - -740.742419146||-||2233.29233169)||/||20353.4169025|
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 -3.49 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