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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 Corning Inc was -1.39. The lowest was -5.80. And the median was -2.68.
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 Corning 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 * 0.8014||+||0.528 * 1.0076||+||0.404 * 1.1284||+||0.892 * 1.1684||+||0.115 * 0.8448|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7665||+||4.679 * -0.0904||-||0.327 * 0.9674|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $1,487 Mil.|
Revenue was 2265 + 2404 + 2540 + 2482 = $9,691 Mil.
Gross Profit was 929 + 996 + 1089 + 1032 = $4,046 Mil.
Total Current Assets was $9,238 Mil.
Total Assets was $29,323 Mil.
Property, Plant and Equipment(Net PPE) was $12,708 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,194 Mil.
Selling, General & Admin. Expense(SGA) was $1,132 Mil.
Total Current Liabilities was $1,895 Mil.
Long-Term Debt was $3,165 Mil.
Net Income was 407 + 988 + 1014 + 169 = $2,578 Mil.
Non Operating Income was 106 + 828 + 815 + -93 = $1,656 Mil.
Cash Flow from Operations was 601 + 1112 + 1117 + 743 = $3,573 Mil.
|Accounts Receivable was $1,588 Mil.
Revenue was 2289 + 1956 + 2067 + 1982 = $8,294 Mil.
Gross Profit was 935 + 770 + 901 + 883 = $3,489 Mil.
Total Current Assets was $9,613 Mil.
Total Assets was $29,544 Mil.
Property, Plant and Equipment(Net PPE) was $13,344 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,044 Mil.
Selling, General & Admin. Expense(SGA) was $1,264 Mil.
Total Current Liabilities was $2,046 Mil.
Long-Term Debt was $3,224 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)|
|=||(1487 / 9691)||/||(1588 / 8294)|
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)|
|=||(996 / 8294)||/||(929 / 9691)|
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 - (9238 + 12708) / 29323)||/||(1 - (9613 + 13344) / 29544)|
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))|
|=||(1044 / (1044 + 13344))||/||(1194 / (1194 + 12708))|
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)|
|=||(1132 / 9691)||/||(1264 / 8294)|
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)|
|=||((3165 + 1895) / 29323)||/||((3224 + 2046) / 29544)|
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|
|=||(2578 - 1656||-||3573)||/||29323|
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.
Corning Inc has a M-score of -2.85 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
Corning Inc Annual Data
Corning Inc Quarterly Data