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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 -1.45. The lowest was -5.76. And the median was -2.71.
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 * 1.1291||+||0.528 * 1.0338||+||0.404 * 0.9947||+||0.892 * 0.985||+||0.115 * 1.0444|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.4209||+||4.679 * -0.009||-||0.327 * 1.0592|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $1,645 Mil.|
Revenue was 2507 + 2360 + 2047 + 2231 = $9,145 Mil.
Gross Profit was 1041 + 951 + 764 + 857 = $3,613 Mil.
Total Current Assets was $8,479 Mil.
Total Assets was $28,809 Mil.
Property, Plant and Equipment(Net PPE) was $13,293 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,192 Mil.
Selling, General & Admin. Expense(SGA) was $1,667 Mil.
Total Current Liabilities was $2,294 Mil.
Long-Term Debt was $3,916 Mil.
Net Income was 284 + 2207 + -368 + 224 = $2,347 Mil.
Non Operating Income was -246 + 1490 + -814 + 116 = $546 Mil.
Cash Flow from Operations was 652 + 526 + -83 + 964 = $2,059 Mil.
|Accounts Receivable was $1,479 Mil.
Revenue was 2272 + 2343 + 2265 + 2404 = $9,284 Mil.
Gross Profit was 892 + 975 + 929 + 996 = $3,792 Mil.
Total Current Assets was $9,253 Mil.
Total Assets was $28,898 Mil.
Property, Plant and Equipment(Net PPE) was $12,549 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,180 Mil.
Selling, General & Admin. Expense(SGA) was $1,191 Mil.
Total Current Liabilities was $1,966 Mil.
Long-Term Debt was $3,915 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)|
|=||(1645 / 9145)||/||(1479 / 9284)|
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)|
|=||(3792 / 9284)||/||(3613 / 9145)|
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 - (8479 + 13293) / 28809)||/||(1 - (9253 + 12549) / 28898)|
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))|
|=||(1180 / (1180 + 12549))||/||(1192 / (1192 + 13293))|
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)|
|=||(1667 / 9145)||/||(1191 / 9284)|
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)|
|=||((3916 + 2294) / 28809)||/||((3915 + 1966) / 28898)|
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|
|=||(2347 - 546||-||2059)||/||28809|
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 -2.49 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