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Empire District Electric Co (NYSE:EDE)
Beneish M-Score
-3.27 (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 -3.27 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: -3.27

-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 -2.74.


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 * 1.4056+0.528 * 0.8996+0.404 * 0.9824+0.892 * 0.96+0.115 * 1.0897
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 5.7965+4.679 * -0.0567-0.327 * 0.9681
=-3.27

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $58.1 Mil.
Revenue was 139.32 + 151.315 + 136.758 + 169.714 = $597.1 Mil.
Gross Profit was 100.337 + 78.069 + 55.973 + 82.727 = $317.1 Mil.
Total Current Assets was $167.3 Mil.
Total Assets was $2,468.6 Mil.
Property, Plant and Equipment(Net PPE) was $2,048.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $83.9 Mil.
Selling, General & Admin. Expense(SGA) was $8.3 Mil.
Total Current Liabilities was $151.4 Mil.
Long-Term Debt was $829.5 Mil.
Net Income was 9.225 + 14.009 + 9.905 + 25.285 = $58.4 Mil.
Non Operating Income was 0.818 + 1.332 + 2.497 + 0.581 = $5.2 Mil.
Cash Flow from Operations was 30.976 + 51.375 + 39.142 + 71.593 = $193.1 Mil.
Accounts Receivable was $43.1 Mil.
Revenue was 134.557 + 164.544 + 151.363 + 171.512 = $622.0 Mil.
Gross Profit was 93.363 + 75.593 + 54.228 + 73.953 = $297.1 Mil.
Total Current Assets was $196.2 Mil.
Total Assets was $2,434.7 Mil.
Property, Plant and Equipment(Net PPE) was $1,984.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $88.9 Mil.
Selling, General & Admin. Expense(SGA) was $1.5 Mil.
Total Current Liabilities was $196.4 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)
=(58.114 / 597.107) / (43.068 / 621.976)
=0.09732594 / 0.06924383
=1.4056

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)
=(297.137 / 621.976) / (317.106 / 597.107)
=0.47773065 / 0.53107065
=0.8996

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 - (167.288 + 2048.583) / 2468.635) / (1 - (196.224 + 1984.757) / 2434.745)
=0.10239019 / 0.10422611
=0.9824

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
=597.107 / 621.976
=0.96

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))
=(88.925 / (88.925 + 1984.757)) / (83.918 / (83.918 + 2048.583))
=0.04288266 / 0.03935192
=1.0897

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)
=(8.297 / 597.107) / (1.491 / 621.976)
=0.01389533 / 0.0023972
=5.7965

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)
=((829.537 + 151.431) / 2468.635) / ((803.063 + 196.369) / 2434.745)
=0.39737264 / 0.41048734
=0.9681

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
=(58.424 - 5.228 - 193.086) / 2468.635
=-0.0567

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 -3.27 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 0.92330.89451.01941.06650.82230.92211.13660.65471.6233
GMI 0.88991.0020.92740.95210.93730.97741.14581.07230.9233
AQI 1.19260.91351.02390.96751.09041.01550.74441.06090.9406
SGI 1.13631.18920.95951.08871.06580.96571.06681.09760.9283
DEPI 1.05730.86361.02580.91340.92341.1761.04640.94730.9862
SGAI 2.761300.993715.53971.05381.03170.06620.03250
LVGI 1.010.98430.93010.92020.94090.97611.03481.03240.9847
TATA -0.0235-0.05-0.0511-0.0479-0.0388-0.0483-0.046-0.0392-0.0546
M-score -2.82-2.51-2.74-5.09-2.76-2.79-2.38-2.68-2.12

Empire District Electric Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.04520.89720.91320.65470.78281.62331.33851.4056
GMI 1.13551.16251.24340.98770.78010.8280.8060.8996
AQI 0.7260.72280.70771.06091.12130.94060.96670.9824
SGI 1.09061.1041.13171.09760.95410.92830.92960.96
DEPI 0.96290.92870.9330.94730.97610.98621.05161.0897
SGAI 000.3345-7.10340.2671-0.4206-0.77445.7965
LVGI 1.04521.06051.06231.03240.98010.98470.99040.9681
TATA -0.0467-0.0406-0.0431-0.0387-0.0495-0.0542-0.0534-0.0567
M-score -2.46-2.55-2.55-1.50-2.89-2.09-2.28-3.27
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