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GuruFocus has detected 6 Warning Signs with Corning Inc $GLW.
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Corning Inc (NYSE:GLW)
Beneish M-Score
-2.66 (As of Today)

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 -2.66 suggests that the company is not a manipulator.

GLW' s Beneish M-Score Range Over the Past 10 Years
Min: -5.76   Max: -1.74
Current: -2.66

-5.76
-1.74

During the past 13 years, the highest Beneish M-Score of Corning Inc was -1.74. The lowest was -5.76. And the median was -2.66.


Definition

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 * 1.0474+0.528 * 1.005+0.404 * 0.8472+0.892 * 1.0306+0.115 * 0.9843
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9471+4.679 * -0.0449-0.327 * 0.9757
=-2.66

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,481 Mil.
Revenue was 2476 + 2507 + 2360 + 2047 = $9,390 Mil.
Gross Profit was 990 + 1041 + 951 + 764 = $3,746 Mil.
Total Current Assets was $9,048 Mil.
Total Assets was $27,899 Mil.
Property, Plant and Equipment(Net PPE) was $12,546 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,195 Mil.
Selling, General & Admin. Expense(SGA) was $1,472 Mil.
Total Current Liabilities was $2,751 Mil.
Long-Term Debt was $3,646 Mil.
Net Income was 1572 + 284 + 2207 + -368 = $3,695 Mil.
Non Operating Income was 1998 + -246 + 1490 + -814 = $2,428 Mil.
Cash Flow from Operations was 1426 + 652 + 526 + -83 = $2,521 Mil.
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 $28,527 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 $1,508 Mil.
Total Current Liabilities was $2,814 Mil.
Long-Term Debt was $3,890 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1481 / 9390) / (1372 / 9111)
=0.15772098 / 0.1505872
=1.0474

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3653 / 9111) / (3746 / 9390)
=0.40094391 / 0.39893504
=1.005

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (9048 + 12546) / 27899) / (1 - (8269 + 12648) / 28527)
=0.22599376 / 0.26676482
=0.8472

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=9390 / 9111
=1.0306

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))
=(1184 / (1184 + 12648)) / (1195 / (1195 + 12546))
=0.08559861 / 0.08696601
=0.9843

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)
=(1472 / 9390) / (1508 / 9111)
=0.15676251 / 0.16551421
=0.9471

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)
=((3646 + 2751) / 27899) / ((3890 + 2814) / 28527)
=0.22929137 / 0.23500543
=0.9757

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(3695 - 2428 - 2521) / 27899
=-0.0449

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 -2.66 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Corning Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.01310.58931.62151.05120.93471.1850.98610.96410.97471.0474
GMI 0.94061.01911.18650.84381.01441.09410.97441.01931.04031.005
AQI 1.09921.29271.09260.8510.98181.00991.11480.68331.13610.8472
SGI 1.13261.0150.9071.22931.18971.01550.97591.24250.93781.0306
DEPI 1.10981.17820.8671.0341.05920.95940.92491.07951.00380.9843
SGAI 0.93960.97331.0780.93720.85131.15430.95750.85921.33770.9471
LVGI 0.8610.70240.87651.00940.97421.13440.96971.04791.27270.9757
TATA -0.00490.0931-0.0787-0.0936-0.0704-0.0838-0.0716-0.1321-0.0615-0.0449
M-score -2.30-2.16-2.21-2.80-2.66-2.71-2.81-3.01-2.92-2.66

Corning Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.9940.96410.80140.86470.92210.97471.01721.07141.12911.0474
GMI 1.01371.01931.00760.99061.01081.04031.06451.07421.03381.005
AQI 0.67840.68331.12841.13841.08161.13611.130.90970.99470.8472
SGI 1.15711.24251.16841.08621.00180.93780.91770.93280.9851.0306
DEPI 1.1431.07950.84480.87250.94411.00381.01291.03291.04440.9843
SGAI 0.99160.85920.7590.79230.89651.33771.45331.56371.41890.9471
LVGI 1.17611.04790.96741.09341.13081.27271.34251.04641.05920.9757
TATA -0.1439-0.1321-0.0904-0.0811-0.064-0.0615-0.0331-0.0156-0.009-0.0449
M-score -3.18-3.01-2.85-2.87-2.84-2.92-2.79-2.65-2.49-2.66
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