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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 Huntsman Corp was 89.33. The lowest was -4.16. And the median was -2.61.
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 * 1.4277||+||0.528 * 0.9611||+||0.404 * 1.2129||+||0.892 * 0.9888||+||0.115 * 1.3109|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0536||+||4.679 * -0.0685||-||0.327 * 1.0561|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $1,721 Mil.|
Revenue was 2740 + 2589 + 2951 + 2884 = $11,164 Mil.
Gross Profit was 549 + 450 + 449 + 515 = $1,963 Mil.
Total Current Assets was $4,595 Mil.
Total Assets was $10,578 Mil.
Property, Plant and Equipment(Net PPE) was $4,328 Mil.
Depreciation, Depletion and Amortization(DDA) was $400 Mil.
Selling, General & Admin. Expense(SGA) was $996 Mil.
Total Current Liabilities was $2,122 Mil.
Long-Term Debt was $4,927 Mil.
Net Income was 29 + 5 + -38 + 188 = $184 Mil.
Non Operating Income was -18 + -2 + -30 + 1 = $-49 Mil.
Cash Flow from Operations was 147 + 34 + 417 + 360 = $958 Mil.
|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.
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)|
|=||(1721 / 11164)||/||(1219 / 11290)|
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)|
|=||(450 / 11290)||/||(549 / 11164)|
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 - (4595 + 4328) / 10578)||/||(1 - (4448 + 3776) / 9442)|
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))|
|=||(471 / (471 + 3776))||/||(400 / (400 + 4328))|
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)|
|=||(996 / 11164)||/||(956 / 11290)|
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)|
|=||((4927 + 2122) / 10578)||/||((3814 + 2144) / 9442)|
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|
|=||(184 - -49||-||958)||/||10578|
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 -2.34 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
Huntsman Corp Annual Data
Huntsman Corp Quarterly Data