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GuruFocus has detected 3 Warning Signs with Goldcorp Inc $GG.
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Goldcorp Inc (NYSE:GG)
Beneish M-Score
-3.59 (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.

Goldcorp Inc has a M-score of -3.57 suggests that the company is not a manipulator.

GG' s Beneish M-Score Range Over the Past 10 Years
Min: -5.87   Max: 3.37
Current: -3.59

-5.87
3.37

During the past 13 years, the highest Beneish M-Score of Goldcorp Inc was 3.37. The lowest was -5.87. And the median was -2.39.


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 Goldcorp 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 * 0.3422+0.528 * 0.5769+0.404 * 0.9552+0.892 * 0.8023+0.115 * 1.4173
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.126+4.679 * -0.0258-0.327 * 0.929
=-3.57

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $95 Mil.
Revenue was 898 + 915 + 753 + 944 = $3,510 Mil.
Gross Profit was 128 + 125 + 22 + 145 = $420 Mil.
Total Current Assets was $1,568 Mil.
Total Assets was $21,497 Mil.
Property, Plant and Equipment(Net PPE) was $17,565 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,024 Mil.
Selling, General & Admin. Expense(SGA) was $187 Mil.
Total Current Liabilities was $777 Mil.
Long-Term Debt was $2,757 Mil.
Net Income was 101 + 59 + -78 + 80 = $162 Mil.
Non Operating Income was -84 + 6 + 12 + -17 = $-83 Mil.
Cash Flow from Operations was 239 + 267 + 234 + 59 = $799 Mil.
Accounts Receivable was $346 Mil.
Revenue was 1072 + 1098 + 1188 + 1017 = $4,375 Mil.
Gross Profit was -11 + 46 + 192 + 75 = $302 Mil.
Total Current Assets was $1,331 Mil.
Total Assets was $21,428 Mil.
Property, Plant and Equipment(Net PPE) was $17,630 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,493 Mil.
Selling, General & Admin. Expense(SGA) was $207 Mil.
Total Current Liabilities was $1,049 Mil.
Long-Term Debt was $2,743 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)
=(95 / 3510) / (346 / 4375)
=0.02706553 / 0.07908571
=0.3422

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)
=(302 / 4375) / (420 / 3510)
=0.06902857 / 0.11965812
=0.5769

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 - (1568 + 17565) / 21497) / (1 - (1331 + 17630) / 21428)
=0.10996883 / 0.11512974
=0.9552

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
=3510 / 4375
=0.8023

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))
=(1493 / (1493 + 17630)) / (1024 / (1024 + 17565))
=0.07807352 / 0.05508634
=1.4173

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)
=(187 / 3510) / (207 / 4375)
=0.05327635 / 0.04731429
=1.126

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)
=((2757 + 777) / 21497) / ((2743 + 1049) / 21428)
=0.16439503 / 0.17696472
=0.929

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
=(162 - -83 - 799) / 21497
=-0.0258

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.

Goldcorp Inc has a M-score of -3.57 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 local exchange's currency.

Goldcorp Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.78681.05431.1571.36760.75531.48720.96960.90150.68970.3422
GMI 1.09811.81650.84280.82970.91271.09851.54781.63862.54660.5769
AQI 0.5641.01731.02981.01091.16110.98450.9350.6072.73270.9552
SGI 1.29051.09641.12561.39511.41111.01360.67840.93191.27330.8023
DEPI 0.78050.94541.00111.18250.86181.11651.01470.82650.38121.4173
SGAI 1.24070.8990.93310.92250.91631.05551.41991.12310.65821.126
LVGI 1.0250.36112.68280.89070.83041.22191.89531.47841.00680.929
TATA -0.0136-0.036-0.0344-0.0192-0.028-0.0142-0.1226-0.112-0.2741-0.0258
M-score -1.76-1.85-2.99-1.89-2.40-2.11-3.47-3.17-2.30-3.57

Goldcorp Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.36220.90151.11580.95440.73030.68970.80920.81160.32030.3422
GMI 1.29131.63862.0492.45883.05672.54661.46712.10541.06470.5769
AQI 1.06730.6070.59140.6170.59422.73270.6380.60892.71060.9552
SGI 0.8240.93190.99581.06971.15891.27331.21011.00780.90380.8023
DEPI 0.96490.82650.71720.59280.52090.38120.50830.67040.79431.4173
SGAI 1.13171.09520.97930.90340.80040.65820.73180.88870.99981.126
LVGI 1.18411.47841.2591.09660.96391.00681.03791.07971.24940.929
TATA -0.0595-0.112-0.1097-0.1265-0.1451-0.2741-0.2657-0.2575-0.2348-0.0258
M-score -2.49-3.17-2.62-2.50-2.35-2.30-3.63-3.47-3.67-3.57
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