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Freeport-McMoRan Inc (NYSE:FCX)
Beneish M-Score
-5.47 (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.

Freeport-McMoRan Inc has a M-score of -5.47 suggests that the company is not a manipulator.

FCX' s Beneish M-Score Range Over the Past 10 Years
Min: -5.83   Max: 2.23
Current: -5.47

-5.83
2.23

During the past 13 years, the highest Beneish M-Score of Freeport-McMoRan Inc was 2.23. The lowest was -5.83. And the median was -2.62.


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 Freeport-McMoRan 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 * 0.5408+0.528 * 0.1174+0.404 * 1.4301+0.892 * 0.7401+0.115 * 0.852
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2273+4.679 * -0.4028-0.327 * 1.3087
=-5.47

* 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 $959 Mil.
Revenue was 3527 + 3795 + 3681 + 4248 = $15,251 Mil.
Gross Profit was -3707 + -3917 + -3752 + -2176 = $-13,552 Mil.
Total Current Assets was $7,233 Mil.
Total Assets was $42,664 Mil.
Property, Plant and Equipment(Net PPE) was $30,819 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,280 Mil.
Selling, General & Admin. Expense(SGA) was $555 Mil.
Total Current Liabilities was $4,426 Mil.
Long-Term Debt was $19,638 Mil.
Net Income was -4173 + -4071 + -3819 + -1841 = $-13,904 Mil.
Non Operating Income was 38 + 2 + -40 + 37 = $37 Mil.
Cash Flow from Operations was 740 + 612 + 822 + 1069 = $3,243 Mil.
Accounts Receivable was $2,396 Mil.
Revenue was 4153 + 5235 + 5696 + 5522 = $20,606 Mil.
Gross Profit was -2802 + -2066 + 1291 + 1427 = $-2,150 Mil.
Total Current Assets was $8,854 Mil.
Total Assets was $56,065 Mil.
Property, Plant and Equipment(Net PPE) was $42,973 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,836 Mil.
Selling, General & Admin. Expense(SGA) was $611 Mil.
Total Current Liabilities was $4,410 Mil.
Long-Term Debt was $19,754 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)
=(959 / 15251) / (2396 / 20606)
=0.06288112 / 0.11627681
=0.5408

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)
=(-2150 / 20606) / (-13552 / 15251)
=-0.10433854 / -0.88859747
=0.1174

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 - (7233 + 30819) / 42664) / (1 - (8854 + 42973) / 56065)
=0.10810051 / 0.07559083
=1.4301

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
=15251 / 20606
=0.7401

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))
=(3836 / (3836 + 42973)) / (3280 / (3280 + 30819))
=0.08195005 / 0.0961905
=0.852

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)
=(555 / 15251) / (611 / 20606)
=0.03639106 / 0.02965156
=1.2273

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)
=((19638 + 4426) / 42664) / ((19754 + 4410) / 56065)
=0.56403525 / 0.43099973
=1.3087

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
=(-13904 - 37 - 3243) / 42664
=-0.4028

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.

Freeport-McMoRan Inc has a M-score of -5.47 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.

Freeport-McMoRan Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.50980.86380.46583.27611.1080.41881.29021.34720.64870.939
GMI 1.07861.35551.53160.58220.93381.04361.33211.19213.3295-0.1133
AQI 0.32848.56240.40781.00441.02730.62911.98620.82190.73331.3749
SGI 1.38562.92531.05060.84511.26211.10.86251.16161.02470.7406
DEPI 1.10871.48980.44161.61711.04181.30360.90870.95410.71190.8527
SGAI 1.09121.01420.54951.4120.94040.99021.20411.31230.87931.2978
LVGI 0.70930.89641.64550.80280.79850.70420.96012.0461.0121.2888
TATA -0.0821-0.0821-0.6176-0.0595-0.0627-0.0639-0.0167-0.0561-0.1194-0.3311
M-score -3.112.06-5.97-0.96-2.38-3.22-1.87-2.65-2.23-4.92

Freeport-McMoRan Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.34721.13351.15830.9160.64871.04310.96121.05160.9390.5408
GMI 1.19211.19391.04751.10593.3295-2.7108-0.9762-0.4306-0.11330.1174
AQI 0.82191.89441.54211.52640.73330.76040.77320.86671.37491.4301
SGI 1.16161.18541.26721.12991.02470.96640.8570.7840.74060.7401
DEPI 0.95410.74410.38740.54880.71190.81370.92330.85280.85270.852
SGAI 1.31231.30180.98011.00780.87930.93121.0621.0951.29781.2273
LVGI 2.0461.25510.92470.93121.0121.09441.17481.28551.28881.3087
TATA -0.0558-0.0645-0.0675-0.0737-0.1194-0.1691-0.2136-0.2916-0.3311-0.4028
M-score -2.65-2.19-2.21-2.55-2.23-5.36-4.85-4.93-4.92-5.47
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