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M.D.C. Holdings Inc (NYSE:MDC)
Beneish M-Score
-2.53 (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.

M.D.C. Holdings Inc has a M-score of -2.53 suggests that the company is not a manipulator.

MDC' s Beneish M-Score Range Over the Past 10 Years
Min: -5.29   Max: 2.41
Current: -2.53

-5.29
2.41

During the past 13 years, the highest Beneish M-Score of M.D.C. Holdings Inc was 2.41. The lowest was -5.29. And the median was -2.00.


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 M.D.C. Holdings 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 * 0.7245+0.528 * 1.0601+0.404 * 0.9624+0.892 * 1.1269+0.115 * 0.9058
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9881+4.679 * 0.0174-0.327 * 1.0049
=-2.53

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $23 Mil.
Revenue was 530.101 + 468.487 + 473.128 + 377.919 = $1,850 Mil.
Gross Profit was 70.185 + 81.905 + 83.902 + 57.802 = $294 Mil.
Total Current Assets was $2,064 Mil.
Total Assets was $2,416 Mil.
Property, Plant and Equipment(Net PPE) was $28 Mil.
Depreciation, Depletion and Amortization(DDA) was $4 Mil.
Selling, General & Admin. Expense(SGA) was $226 Mil.
Total Current Liabilities was $230 Mil.
Long-Term Debt was $929 Mil.
Net Income was 22.595 + 14.778 + 19.998 + 8.42 = $66 Mil.
Non Operating Income was 23.776 + -2.526 + -1.055 + 3.298 = $23 Mil.
Cash Flow from Operations was 26.701 + -70.995 + 29.083 + 15.426 = $0 Mil.
Accounts Receivable was $29 Mil.
Revenue was 461.719 + 418.403 + 442.752 + 318.534 = $1,641 Mil.
Gross Profit was 65.008 + 72.738 + 79.59 + 59.056 = $276 Mil.
Total Current Assets was $1,994 Mil.
Total Assets was $2,351 Mil.
Property, Plant and Equipment(Net PPE) was $30 Mil.
Depreciation, Depletion and Amortization(DDA) was $4 Mil.
Selling, General & Admin. Expense(SGA) was $203 Mil.
Total Current Liabilities was $223 Mil.
Long-Term Debt was $900 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)
=(23.314 / 1849.635) / (28.555 / 1641.408)
=0.01260465 / 0.01739665
=0.7245

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)
=(81.905 / 1641.408) / (70.185 / 1849.635)
=0.16838714 / 0.15883891
=1.0601

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 - (2064.401 + 28.226) / 2415.899) / (1 - (1994.034 + 30.491) / 2351.456)
=0.13381023 / 0.13903343
=0.9624

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
=1849.635 / 1641.408
=1.1269

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))
=(3.928 / (3.928 + 30.491)) / (4.069 / (4.069 + 28.226))
=0.11412301 / 0.12599474
=0.9058

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)
=(226.317 / 1849.635) / (203.252 / 1641.408)
=0.12235765 / 0.12382784
=0.9881

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)
=((929.135 + 230.472) / 2415.899) / ((900.29 + 222.83) / 2351.456)
=0.47998985 / 0.47762748
=1.0049

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
=(65.791 - 23.493 - 0.215) / 2415.899
=0.0174

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.

M.D.C. Holdings Inc has a M-score of -2.53 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.

M.D.C. Holdings Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.92191.63730.2390.95430.79482.87470.95230.58981.20410.7245
GMI 0.7951.42241.11770.72510.95551.24971.13460.86261.04431.0607
AQI 1.23821.12280.56890.94111.08331.93281.2251.51721.06280.9624
SGI 0.98310.61090.49710.61611.06720.88061.36961.40911.01321.127
DEPI 0.92321.10652.66581.57090.99710.82751.18771.1430.96430.9058
SGAI 5.9611.21741.23391.16790.98460.95990.59570.90470.94060.988
LVGI 0.90451.14091.10420.99111.09970.86771.02730.97320.89691.0049
TATA -0.0094-0.1669-0.2271-0.07330.05640.01110.07520.21530.09880.0193
M-score -3.45-2.82-4.69-3.34-2.37-0.27-1.60-1.31-1.73-2.52

M.D.C. Holdings Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.54470.590.7630.65040.81471.19121.06680.93721.02930.7245
GMI 0.89290.85540.88970.94741.00971.01951.07541.07681.04221.0601
AQI 1.33621.51721.8641.16280.82851.06281.07231.14451.08670.9624
SGI 1.51351.40861.23861.14231.03881.02411.071.06191.11291.1269
DEPI 1.21511.1431.12311.07691.00190.96430.89250.86720.89810.9058
SGAI 0.88780.90510.950.95330.94890.93050.89970.93770.95710.9881
LVGI 1.01540.97320.91710.94470.96460.89690.89510.95810.91681.0049
TATA 0.22220.2110.23830.11690.10980.0970.03730.03130.02740.0174
M-score -1.28-1.33-1.03-2.05-2.15-1.75-2.07-2.23-2.14-2.53
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