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Cenovus Energy Inc (NYSE:CVE)
Beneish M-Score
-3.08 (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 -3.16 suggests that the company is not a manipulator.

CVE' s 10-Year Beneish M-Score Range
Min: -3.19   Max: -2.6
Current: -3.08

-3.19
-2.6

During the past 6 years, the highest Beneish M-Score of Cenovus Energy Inc was -2.60. The lowest was -3.19. And the median was -3.00.


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 * 0.8372+0.528 * 1.128+0.404 * 0.3782+0.892 * 1.0966+0.115 * 0.9866
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9432+4.679 * -0.0891-0.327 * 1.0816
=-3.16

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $2,015 Mil.
Revenue was 4654.2311192 + 4412.24862888 + 5014.47876448 + 4417.30769231 = $18,498 Mil.
Gross Profit was 1092.81164695 + 835.466179159 + 1141.89189189 + 952.884615385 = $4,023 Mil.
Total Current Assets was $4,238 Mil.
Total Assets was $22,738 Mil.
Property, Plant and Equipment(Net PPE) was $17,755 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,717 Mil.
Selling, General & Admin. Expense(SGA) was $351 Mil.
Total Current Liabilities was $3,658 Mil.
Long-Term Debt was $4,728 Mil.
Net Income was 224.74977252 + -53.0164533821 + 357.142857143 + 172.115384615 = $701 Mil.
Non Operating Income was 101.000909918 + -157.221206581 + -10.6177606178 + -122.115384615 = $-189 Mil.
Cash Flow from Operations was 415.832575068 + 892.138939671 + 810.810810811 + 796.153846154 = $2,915 Mil.
Accounts Receivable was $2,195 Mil.
Revenue was 4295.38763494 + 3832.66129032 + 4520.77001013 + 4219.92110454 = $16,869 Mil.
Gross Profit was 1135.42688911 + 893.14516129 + 1227.96352584 + 881.656804734 = $4,138 Mil.
Total Current Assets was $4,785 Mil.
Total Assets was $24,017 Mil.
Property, Plant and Equipment(Net PPE) was $17,153 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,635 Mil.
Selling, General & Admin. Expense(SGA) was $340 Mil.
Total Current Liabilities was $3,500 Mil.
Long-Term Debt was $4,689 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)
=(2015.46860783 / 18498.2662049) / (2195.28949951 / 16868.7400399)
=0.10895446 / 0.13013951
=0.8372

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)
=(835.466179159 / 16868.7400399) / (1092.81164695 / 18498.2662049)
=0.24531722 / 0.21748278
=1.128

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 - (4238.39854413 + 17755.2320291) / 22737.9435851) / (1 - (4785.08341511 + 17153.0912659) / 24016.6830226)
=0.0327344 / 0.08654436
=0.3782

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
=18498.2662049 / 16868.7400399
=1.0966

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))
=(1634.81081452 / (1634.81081452 + 17153.0912659)) / (1717.48713153 / (1717.48713153 + 17755.2320291))
=0.08701402 / 0.08819966
=0.9866

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)
=(351.488296349 / 18498.2662049) / (339.831294338 / 16868.7400399)
=0.01900115 / 0.02014562
=0.9432

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)
=((4727.9344859 + 3657.87079163) / 22737.9435851) / ((4688.91069676 + 3500.49067713) / 24016.6830226)
=0.36880227 / 0.34098803
=1.0816

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
=(700.991560897 - -188.953441896 - 2914.9361717) / 22737.9435851
=-0.0891

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 -3.16 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 0.97170.9227
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 -3.07-3.26

Cenovus Energy Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.85370.93011.18621.00191.29381.21821.02820.87930.8372
GMI 0.871.04010.99681.00080.95690.89150.99451.04941.128
AQI 0.61190.65340.58520.65490.64630.6570.71340.35220.3782
SGI 1.29291.18351.15591.05440.97340.98810.9821.0491.0966
DEPI 1.07880.9971.01350.96770.93250.91520.92550.8980.9866
SGAI 0.68470.74380.97891.11051.26331.34251.06420.90380.9432
LVGI 0.9080.74881.10791.05350.88571.18151.04331.05991.0816
TATA -0.0616-0.08-0.0909-0.097-0.1183-0.1202-0.1051-0.1071-0.0891
M-score -2.77-2.75-2.79-3.06-2.97-3.18-3.11-3.30-3.16
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