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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 -2.46.
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 * 0.8205||+||0.528 * 2.1567||+||0.404 * 0.6089||+||0.892 * 0.9969||+||0.115 * 0.6715|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8984||+||4.679 * -0.2575||-||0.327 * 1.0797|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $400 Mil.|
Revenue was 753 + 944 + 1072 + 1098 = $3,867 Mil.
Gross Profit was 22 + 145 + -11 + 46 = $202 Mil.
Total Current Assets was $1,321 Mil.
Total Assets was $21,271 Mil.
Property, Plant and Equipment(Net PPE) was $19,422 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,318 Mil.
Selling, General & Admin. Expense(SGA) was $206 Mil.
Total Current Liabilities was $817 Mil.
Long-Term Debt was $2,868 Mil.
Net Income was -78 + 80 + -4271 + -192 = $-4,461 Mil.
Non Operating Income was 12 + -17 + -103 + -12 = $-120 Mil.
Cash Flow from Operations was 234 + 59 + 401 + 443 = $1,137 Mil.
|Accounts Receivable was $489 Mil.
Revenue was 1188 + 1017 + 835 + 839 = $3,879 Mil.
Gross Profit was 192 + 75 + 38 + 132 = $437 Mil.
Total Current Assets was $2,436 Mil.
Total Assets was $27,890 Mil.
Property, Plant and Equipment(Net PPE) was $24,317 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,084 Mil.
Selling, General & Admin. Expense(SGA) was $230 Mil.
Total Current Liabilities was $1,114 Mil.
Long-Term Debt was $3,361 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)|
|=||(400 / 3867)||/||(489 / 3879)|
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)|
|=||(437 / 3879)||/||(202 / 3867)|
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 - (1321 + 19422) / 21271)||/||(1 - (2436 + 24317) / 27890)|
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))|
|=||(1084 / (1084 + 24317))||/||(1318 / (1318 + 19422))|
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)|
|=||(206 / 3867)||/||(230 / 3879)|
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)|
|=||((2868 + 817) / 21271)||/||((3361 + 1114) / 27890)|
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|
|=||(-4461 - -120||-||1137)||/||21271|
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 -3.45 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