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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 -1.70. The lowest was -5.77. 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 * 0.9747||+||0.528 * 1.0403||+||0.404 * 1.1383||+||0.892 * 0.9378||+||0.115 * 1.0038|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.341||+||4.679 * -0.0614||-||0.327 * 1.2756|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $1,372 Mil.|
Revenue was 2231 + 2272 + 2343 + 2265 = $9,111 Mil.
Gross Profit was 857 + 892 + 975 + 929 = $3,653 Mil.
Total Current Assets was $8,269 Mil.
Total Assets was $28,547 Mil.
Property, Plant and Equipment(Net PPE) was $12,648 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,184 Mil.
Selling, General & Admin. Expense(SGA) was $1,523 Mil.
Total Current Liabilities was $2,814 Mil.
Long-Term Debt was $3,910 Mil.
Net Income was 224 + 212 + 496 + 407 = $1,339 Mil.
Non Operating Income was 116 + -142 + 203 + 106 = $283 Mil.
Cash Flow from Operations was 964 + 697 + 547 + 601 = $2,809 Mil.
|Accounts Receivable was $1,501 Mil.
Revenue was 2404 + 2540 + 2482 + 2289 = $9,715 Mil.
Gross Profit was 996 + 1089 + 1032 + 935 = $4,052 Mil.
Total Current Assets was $10,238 Mil.
Total Assets was $30,063 Mil.
Property, Plant and Equipment(Net PPE) was $12,766 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,200 Mil.
Selling, General & Admin. Expense(SGA) was $1,211 Mil.
Total Current Liabilities was $2,324 Mil.
Long-Term Debt was $3,227 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)|
|=||(1372 / 9111)||/||(1501 / 9715)|
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)|
|=||(892 / 9715)||/||(857 / 9111)|
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 - (8269 + 12648) / 28547)||/||(1 - (10238 + 12766) / 30063)|
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))|
|=||(1200 / (1200 + 12766))||/||(1184 / (1184 + 12648))|
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)|
|=||(1523 / 9111)||/||(1211 / 9715)|
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)|
|=||((3910 + 2814) / 28547)||/||((3227 + 2324) / 30063)|
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|
|=||(1339 - 283||-||2809)||/||28547|
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 -2.92 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