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McMoRan Exploration Co. (NYSE:MMR)
Beneish M-Score
0.00 (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.

McMoRan Exploration Co. has a M-score of -1.30 signals that the company is a manipulator.

MMR' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 13 years, the highest Beneish M-Score of McMoRan Exploration Co. was 0.00. The lowest was 0.00. And the median was 0.00.


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 McMoRan Exploration Co. 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 * 1.2604+0.528 * 3.6235+0.404 * 1.0481+0.892 * 0.6572+0.115 * 1.5763
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6746+4.679 * -0.0262-0.327 * 0.9582
=-1.30

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

This Year (Mar13) TTM:Last Year (Mar12) TTM:
Accounts Receivable was $57.2 Mil.
Revenue was 81.446 + 84.17 + 91.776 + 90.295 = $347.7 Mil.
Gross Profit was 38.596 + -80.308 + 43.737 + 58.118 = $60.1 Mil.
Total Current Assets was $198.8 Mil.
Total Assets was $2,691.0 Mil.
Property, Plant and Equipment(Net PPE) was $2,424.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $168.4 Mil.
Selling, General & Admin. Expense(SGA) was $53.3 Mil.
Total Current Liabilities was $304.2 Mil.
Long-Term Debt was $490.0 Mil.
Net Income was 62.953 + 9.079 + -53.707 + -65.158 = $-46.8 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 28.87 + -28.878 + 12.061 + 11.698 = $23.8 Mil.
Accounts Receivable was $69.0 Mil.
Revenue was 110.647 + 121.919 + 138.183 + 158.308 = $529.1 Mil.
Gross Profit was 71.919 + 76.624 + 76.952 + 106.119 = $331.6 Mil.
Total Current Assets was $550.3 Mil.
Total Assets was $2,927.4 Mil.
Property, Plant and Equipment(Net PPE) was $2,306.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $263.1 Mil.
Selling, General & Admin. Expense(SGA) was $48.5 Mil.
Total Current Liabilities was $413.8 Mil.
Long-Term Debt was $487.9 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)
=(57.15 / 347.687) / (68.998 / 529.057)
=0.16437198 / 0.13041695
=1.2604

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)
=(-80.308 / 529.057) / (38.596 / 347.687)
=0.62680203 / 0.1729803
=3.6235

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 - (198.759 + 2424.356) / 2691.042) / (1 - (550.324 + 2306.589) / 2927.417)
=0.0252419 / 0.02408403
=1.0481

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
=347.687 / 529.057
=0.6572

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))
=(263.061 / (263.061 + 2306.589)) / (168.39 / (168.39 + 2424.356))
=0.10237231 / 0.06494659
=1.5763

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)
=(53.322 / 347.687) / (48.452 / 529.057)
=0.15336208 / 0.09158181
=1.6746

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)
=((489.997 + 304.162) / 2691.042) / ((487.89 + 413.752) / 2927.417)
=0.29511208 / 0.30799917
=0.9582

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
=(-46.833 - 0 - 23.751) / 2691.042
=-0.0262

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.

McMoRan Exploration Co. has a M-score of -1.30 signals that the company is likely to 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.

McMoRan Exploration Co. Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
DSRI 1.25532.34590.30930.76621.22920.39281.74161.08840.65161.0743
GMI -0.30870.755-1.48730.59330.76330.82171.37250.95860.91932.5302
AQI 2.53520.61180.50520.47220.86892.12711.17230.48231.03751.0834
SGI 0.36821.85244.35951.61182.29412.22890.4060.99761.27860.6786
DEPI 1.07655.04440.56160.46551.79540.32981.63612.07321.10311.8273
SGAI 3.54570.91150.31950.65770.58830.93722.84690.18683.07431.5781
LVGI 2.79630.92631.08860.9690.66950.77481.00780.62850.99221.0233
TATA -0.0994-0.0431-0.2694-0.3475-0.1559-0.6315-0.274-0.0754-0.0827-0.0515
M-score -4.36-0.46-2.85-4.20-1.75-4.53-3.59-2.60-3.31-2.11

McMoRan Exploration Co. Quarterly Data

Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13
DSRI 1.08841.41551.12181.32090.65160.65440.58490.65771.07431.2604
GMI 0.95861.05141.01710.9930.91930.90880.97961.00812.53023.6235
AQI 0.48230.46580.43930.41351.03751.03981.07631.04991.08341.0481
SGI 0.99760.93271.01481.13941.27861.20540.94250.77870.67860.6572
DEPI 2.07322.51042.23472.03921.10311.2011.60451.96461.82731.5763
SGAI 0.18580.31420.60540.75183.07432.71692.09292.02921.57811.6746
LVGI 0.62850.57990.58160.52770.99220.97130.85270.95671.02330.9582
TATA -0.0754-0.0464-0.0862-0.0835-0.0827-0.0775-0.0579-0.0675-0.0515-0.0262
M-score -2.60-2.13-2.63-2.38-3.31-3.27-3.23-3.34-2.11-1.30
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