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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 McMoRan Exploration Co. was 0.00. The lowest was 0.00. And the median was 0.00.
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|
|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
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)|
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)|
|=||(-80.308 / 529.057)||/||(38.596 / 347.687)|
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 - (198.759 + 2424.356) / 2691.042)||/||(1 - (550.324 + 2306.589) / 2927.417)|
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))|
|=||(263.061 / (263.061 + 2306.589))||/||(168.39 / (168.39 + 2424.356))|
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)|
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)|
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|
|=||(-46.833 - 0||-||23.751)||/||2691.042|
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.
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
McMoRan Exploration Co. Annual Data
McMoRan Exploration Co. Quarterly Data