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Huntsman Corp (NYSE:HUN)
Beneish M-Score
-2.94 (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.

Huntsman Corp has a M-score of -2.94 suggests that the company is not a manipulator.

HUN' s 10-Year Beneish M-Score Range
Min: -4.16   Max: 89.33
Current: -2.94

-4.16
89.33

During the past 13 years, the highest Beneish M-Score of Huntsman Corp was 89.33. The lowest was -4.16. And the median was -2.62.


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 Huntsman Corp 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 * 0.6979+0.528 * 0.9545+0.404 * 1.0066+0.892 * 1.0365+0.115 * 0.963
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9637+4.679 * -0.0433-0.327 * 0.9848
=-2.94

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1,219 Mil.
Revenue was 2988 + 2755 + 2705 + 2842 = $11,290 Mil.
Gross Profit was 505 + 450 + 446 + 507 = $1,908 Mil.
Total Current Assets was $4,448 Mil.
Total Assets was $9,442 Mil.
Property, Plant and Equipment(Net PPE) was $3,776 Mil.
Depreciation, Depletion and Amortization(DDA) was $471 Mil.
Selling, General & Admin. Expense(SGA) was $956 Mil.
Total Current Liabilities was $2,144 Mil.
Long-Term Debt was $3,814 Mil.
Net Income was 119 + 54 + 41 + 64 = $278 Mil.
Non Operating Income was 2 + 3 + -14 + 3 = $-6 Mil.
Cash Flow from Operations was 50 + -67 + 320 + 390 = $693 Mil.
Accounts Receivable was $1,685 Mil.
Revenue was 2830 + 2702 + 2619 + 2741 = $10,892 Mil.
Gross Profit was 451 + 349 + 420 + 537 = $1,757 Mil.
Total Current Assets was $3,932 Mil.
Total Assets was $8,654 Mil.
Property, Plant and Equipment(Net PPE) was $3,613 Mil.
Depreciation, Depletion and Amortization(DDA) was $432 Mil.
Selling, General & Admin. Expense(SGA) was $957 Mil.
Total Current Liabilities was $2,091 Mil.
Long-Term Debt was $3,454 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)
=(1219 / 11290) / (1685 / 10892)
=0.10797166 / 0.1547007
=0.6979

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)
=(450 / 10892) / (505 / 11290)
=0.16131105 / 0.16899911
=0.9545

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 - (4448 + 3776) / 9442) / (1 - (3932 + 3613) / 8654)
=0.12899809 / 0.12814883
=1.0066

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
=11290 / 10892
=1.0365

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))
=(432 / (432 + 3613)) / (471 / (471 + 3776))
=0.10679852 / 0.11090181
=0.963

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)
=(956 / 11290) / (957 / 10892)
=0.08467671 / 0.08786265
=0.9637

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)
=((3814 + 2144) / 9442) / ((3454 + 2091) / 8654)
=0.63101038 / 0.64074416
=0.9848

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
=(278 - -6 - 693) / 9442
=-0.0433

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.

Huntsman Corp has a M-score of -2.94 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 own currency.

Huntsman Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.05040.81740.91140.68351.48741.20270.85221.00631.015
GMI 0.75231.02711.0211.28960.87980.89040.96320.90191.1491
AQI 1.10620.97821.2840.90570.77511.12360.99560.91271.1423
SGI 0.88321.03371.10541.05840.75041.20681.21310.9970.9903
DEPI 0.96940.9461.04061.00560.88071.10570.93431.04520.9862
SGAI 1.10951.17551.03580.95671.28430.83940.88181.03571.0002
LVGI 0.82740.9221.02470.97790.98871.00530.98460.98061.001
TATA -0.0731-0.08790.0122-0.1148-0.20680.0282-0.014-0.0382-0.0587
M-score -2.93-3.03-2.29-3.13-3.44-1.95-2.49-2.74-2.62

Huntsman Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.87210.83280.89931.00630.92371.05491.04891.0150.52450.6979
GMI 0.98970.98460.93070.90191.00891.06041.13841.14911.00270.9545
AQI 1.021.09881.00970.91271.00531.03191.05791.14231.06121.0066
SGI 1.16471.09681.01810.9970.95820.95250.98150.99031.01421.0365
DEPI 0.93110.8980.9941.04521.02981.03831.03350.98620.96880.963
SGAI 0.92140.90270.95991.03571.07981.11631.10011.00020.97460.9637
LVGI 0.96060.97220.94610.98061.02571.02571.03041.0010.98270.9848
TATA -0.0375-0.041-0.044-0.0382-0.026-0.0254-0.0505-0.0587-0.0547-0.0433
M-score -2.61-2.69-2.77-2.74-2.72-2.57-2.61-2.62-3.13-2.94
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