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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.
During the past 13 years, the highest Beneish M-Score of Goldcorp Inc was 3.37. The lowest was -5.85. And the median was -2.56.
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 * 1.6221||+||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|
* 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 $73 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
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(95 / 3510)||/||(73 / 4375)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(302 / 4375)||/||(420 / 3510)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(162 - -83||-||799)||/||21497|
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 -2.40 suggests that the company will not be a manipulator.
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
Goldcorp Inc Annual Data
Goldcorp Inc Quarterly Data