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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 6.51. The lowest was -6.81. And the median was -2.41.
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 * 0.8092||+||0.528 * 1.4671||+||0.404 * 0.638||+||0.892 * 1.2101||+||0.115 * 0.5083|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7318||+||4.679 * -0.2657||-||0.327 * 1.0379|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $519 Mil.|
Revenue was 944 + 1072 + 1098 + 1188 = $4,302 Mil.
Gross Profit was 145 + -11 + 46 + 192 = $372 Mil.
Total Current Assets was $1,520 Mil.
Total Assets was $21,506 Mil.
Property, Plant and Equipment(Net PPE) was $19,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,442 Mil.
Selling, General & Admin. Expense(SGA) was $209 Mil.
Total Current Liabilities was $875 Mil.
Long-Term Debt was $2,993 Mil.
Net Income was 80 + -4271 + -192 + 392 = $-3,991 Mil.
Non Operating Income was -17 + -103 + -12 + 425 = $293 Mil.
Cash Flow from Operations was 59 + 401 + 443 + 528 = $1,431 Mil.
|Accounts Receivable was $530 Mil.
Revenue was 1017 + 773 + 859 + 906 = $3,555 Mil.
Gross Profit was 75 + 18 + 137 + 221 = $451 Mil.
Total Current Assets was $2,015 Mil.
Total Assets was $28,012 Mil.
Property, Plant and Equipment(Net PPE) was $24,866 Mil.
Depreciation, Depletion and Amortization(DDA) was $905 Mil.
Selling, General & Admin. Expense(SGA) was $236 Mil.
Total Current Liabilities was $1,184 Mil.
Long-Term Debt was $3,670 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)|
|=||(519 / 4302)||/||(530 / 3555)|
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)|
|=||(-11 / 3555)||/||(145 / 4302)|
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 - (1520 + 19432) / 21506)||/||(1 - (2015 + 24866) / 28012)|
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))|
|=||(905 / (905 + 24866))||/||(1442 / (1442 + 19432))|
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)|
|=||(209 / 4302)||/||(236 / 3555)|
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)|
|=||((2993 + 875) / 21506)||/||((3670 + 1184) / 28012)|
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|
|=||(-3991 - 293||-||1431)||/||21506|
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 -3.63 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