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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.
Corning Inc has a M-score of -2.81 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Corning Inc was -1.54. The lowest was -5.79. And the median was -2.69.
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 * 0.9861||+||0.528 * 0.9744||+||0.404 * 1.1148||+||0.892 * 0.9759||+||0.115 * 0.9249|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9575||+||4.679 * -0.0716||-||0.327 * 0.9697|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $1,253 Mil.|
Revenue was 1956 + 2067 + 1982 + 1814 = $7,819 Mil.
Gross Profit was 770 + 901 + 883 + 770 = $3,324 Mil.
Total Current Assets was $8,891 Mil.
Total Assets was $28,478 Mil.
Property, Plant and Equipment(Net PPE) was $9,801 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,002 Mil.
Selling, General & Admin. Expense(SGA) was $1,126 Mil.
Total Current Liabilities was $1,746 Mil.
Long-Term Debt was $3,272 Mil.
Net Income was 421 + 408 + 638 + 494 = $1,961 Mil.
Non Operating Income was 408 + 137 + 431 + 238 = $1,214 Mil.
Cash Flow from Operations was 1284 + 485 + 395 + 623 = $2,787 Mil.
|Accounts Receivable was $1,302 Mil.
Revenue was 2146 + 2038 + 1908 + 1920 = $8,012 Mil.
Gross Profit was 798 + 889 + 808 + 824 = $3,319 Mil.
Total Current Assets was $9,695 Mil.
Total Assets was $29,375 Mil.
Property, Plant and Equipment(Net PPE) was $10,625 Mil.
Depreciation, Depletion and Amortization(DDA) was $997 Mil.
Selling, General & Admin. Expense(SGA) was $1,205 Mil.
Total Current Liabilities was $1,956 Mil.
Long-Term Debt was $3,382 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)|
|=||(1253 / 7819)||/||(1302 / 8012)|
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)|
|=||(901 / 8012)||/||(770 / 7819)|
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 - (8891 + 9801) / 28478)||/||(1 - (9695 + 10625) / 29375)|
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))|
|=||(997 / (997 + 10625))||/||(1002 / (1002 + 9801))|
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)|
|=||(1126 / 7819)||/||(1205 / 8012)|
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)|
|=||((3272 + 1746) / 28478)||/||((3382 + 1956) / 29375)|
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|
|=||(1961 - 1214||-||2787)||/||28478|
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 -2.81 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