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Empire District Electric Co (NYSE:EDE)
Beneish M-Score
-2.45 (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.

Empire District Electric Co has a M-score of -2.45 suggests that the company is not a manipulator.

EDE' s Beneish M-Score Range Over the Past 10 Years
Min: -5.09   Max: -1.5
Current: -2.45

-5.09
-1.5

During the past 13 years, the highest Beneish M-Score of Empire District Electric Co was -1.50. The lowest was -5.09. And the median was -2.72.


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 Empire District Electric Co 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 * 1.3385+0.528 * 0.885+0.404 * 0.9667+0.892 * 0.9296+0.115 * 1.0516
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.4634+4.679 * -0.0534-0.327 * 0.9904
=-2.45

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $65.6 Mil.
Revenue was 151.315 + 136.758 + 169.714 + 134.557 = $592.3 Mil.
Gross Profit was 78.069 + 55.973 + 82.727 + 65.694 = $282.5 Mil.
Total Current Assets was $161.9 Mil.
Total Assets was $2,450.9 Mil.
Property, Plant and Equipment(Net PPE) was $2,036.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $85.7 Mil.
Selling, General & Admin. Expense(SGA) was $-4.3 Mil.
Total Current Liabilities was $141.7 Mil.
Long-Term Debt was $829.4 Mil.
Net Income was 14.009 + 9.905 + 25.285 + 6.77 = $56.0 Mil.
Non Operating Income was 1.332 + 2.497 + 0.581 + 1.023 = $5.4 Mil.
Cash Flow from Operations was 51.375 + 39.142 + 71.593 + 19.345 = $181.5 Mil.
Accounts Receivable was $52.8 Mil.
Revenue was 164.544 + 151.363 + 171.512 + 149.782 = $637.2 Mil.
Gross Profit was 75.593 + 54.228 + 73.953 + 65.137 = $268.9 Mil.
Total Current Assets was $204.9 Mil.
Total Assets was $2,407.6 Mil.
Property, Plant and Equipment(Net PPE) was $1,945.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $86.3 Mil.
Selling, General & Admin. Expense(SGA) was $-9.9 Mil.
Total Current Liabilities was $160.2 Mil.
Long-Term Debt was $803.1 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)
=(65.64 / 592.344) / (52.755 / 637.201)
=0.11081399 / 0.08279177
=1.3385

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)
=(268.911 / 637.201) / (282.463 / 592.344)
=0.42201911 / 0.47685635
=0.885

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 - (161.872 + 2036.317) / 2450.926) / (1 - (204.856 + 1945.915) / 2407.579)
=0.10311898 / 0.10666649
=0.9667

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
=592.344 / 637.201
=0.9296

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))
=(86.319 / (86.319 + 1945.915)) / (85.712 / (85.712 + 2036.317))
=0.04247493 / 0.04039153
=1.0516

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)
=(-4.264 / 592.344) / (-9.898 / 637.201)
=-0.00719852 / -0.01553356
=0.4634

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)
=((829.445 + 141.74) / 2450.926) / ((803.126 + 160.165) / 2407.579)
=0.39625227 / 0.40010774
=0.9904

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
=(55.969 - 5.433 - 181.455) / 2450.926
=-0.0534

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.

Empire District Electric Co has a M-score of -2.45 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.

Empire District Electric Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97990.89731.01941.06650.82230.92211.13660.65470.952
GMI 0.93331.0041.45980.95210.93730.97740.98311.05461.0941
AQI 1.19260.91351.02390.96751.09041.01550.74441.06090.9694
SGI 1.07071.18550.95951.08871.06580.96571.06681.09760.9283
DEPI 1.06690.86921.02580.91340.92341.1761.04640.94730.9862
SGAI 2.930600.99370.99451.009516.82851.09620.90220
LVGI 1.010.98430.93010.92020.94090.97611.03481.03240.9899
TATA -0.0301-0.05-0.0511-0.049-0.0396-0.0483-0.045-0.0377-0.0544
M-score -2.86-2.51-2.46-2.59-2.76-5.51-2.64-2.83-2.63

Empire District Electric Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.13661.04520.89720.91320.65470.78280.9521.3385
GMI 1.14581.13551.16251.24340.98770.85760.90980.885
AQI 0.74440.7260.72280.70771.06091.12130.96940.9667
SGI 1.06681.09061.1041.13171.09760.95410.92830.9296
DEPI 1.04640.96290.92870.9330.94730.97610.98621.0516
SGAI 0.0662000.3345-7.1034-0.59670.23260.4634
LVGI 1.03481.04521.06051.06231.03240.98010.98990.9904
TATA -0.046-0.0467-0.0406-0.0431-0.0387-0.0495-0.0541-0.0534
M-score -2.38-2.46-2.55-2.55-1.50-2.70-2.77-2.45
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