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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 -6.82. And the median was -2.48.
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 * 0.9443||+||0.528 * 1.678||+||0.404 * 0.617||+||0.892 * 1.0811||+||0.115 * 0.5963|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8939||+||4.679 * -0.1265||-||0.327 * 1.0966|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $489 Mil.|
Revenue was 1188 + 1017 + 773 + 859 = $3,837 Mil.
Gross Profit was 192 + 75 + 230 + 329 = $826 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 $1,082 Mil.
Selling, General & Admin. Expense(SGA) was $230 Mil.
Total Current Liabilities was $1,114 Mil.
Long-Term Debt was $3,361 Mil.
Net Income was 392 + -87 + -2396 + -44 = $-2,135 Mil.
Non Operating Income was 425 + -24 + -55 + -4 = $342 Mil.
Cash Flow from Operations was 528 + 58 + 274 + 192 = $1,052 Mil.
|Accounts Receivable was $479 Mil.
Revenue was 884 + 878 + 892 + 895 = $3,549 Mil.
Gross Profit was 212 + 222 + 462 + 386 = $1,282 Mil.
Total Current Assets was $2,812 Mil.
Total Assets was $30,618 Mil.
Property, Plant and Equipment(Net PPE) was $25,783 Mil.
Depreciation, Depletion and Amortization(DDA) was $672 Mil.
Selling, General & Admin. Expense(SGA) was $238 Mil.
Total Current Liabilities was $2,009 Mil.
Long-Term Debt was $2,471 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)|
|=||(489 / 3837)||/||(479 / 3549)|
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)|
|=||(75 / 3549)||/||(192 / 3837)|
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 - (2436 + 24317) / 27890)||/||(1 - (2812 + 25783) / 30618)|
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))|
|=||(672 / (672 + 25783))||/||(1082 / (1082 + 24317))|
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)|
|=||(230 / 3837)||/||(238 / 3549)|
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)|
|=||((3361 + 1114) / 27890)||/||((2471 + 2009) / 30618)|
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|
|=||(-2135 - 342||-||1052)||/||27890|
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 -2.91 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