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Nacco Industries Inc (NYSE:NC)
Beneish M-Score
-2.93 (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.

Nacco Industries Inc has a M-score of -2.93 suggests that the company is not a manipulator.

NC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.82   Max: 21.86
Current: -2.93

-4.82
21.86

During the past 13 years, the highest Beneish M-Score of Nacco Industries Inc was 21.86. The lowest was -4.82. And the median was -2.63.


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 Nacco Industries 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 * 1.1898+0.528 * 1.105+0.404 * 1.3008+0.892 * 1.0166+0.115 * 0.6765
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9305+4.679 * -0.1589-0.327 * 1.1473
=-2.93

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $118.1 Mil.
Revenue was 239.107 + 196.5 + 193.734 + 297.285 = $926.6 Mil.
Gross Profit was 42.215 + 35.381 + 38.189 + 65.835 = $181.6 Mil.
Total Current Assets was $411.3 Mil.
Total Assets was $702.7 Mil.
Property, Plant and Equipment(Net PPE) was $151.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.0 Mil.
Selling, General & Admin. Expense(SGA) was $192.1 Mil.
Total Current Liabilities was $256.0 Mil.
Long-Term Debt was $158.7 Mil.
Net Income was 3.141 + -0.275 + 1.027 + -40.669 = $-36.8 Mil.
Non Operating Income was -0.888 + 0.042 + 0.291 + -1.982 = $-2.5 Mil.
Cash Flow from Operations was 9.933 + 12.409 + 37.472 + 17.581 = $77.4 Mil.
Accounts Receivable was $97.6 Mil.
Revenue was 221.714 + 200.37 + 177.413 + 311.983 = $911.5 Mil.
Gross Profit was 46.543 + 36.523 + 36.171 + 78.181 = $197.4 Mil.
Total Current Assets was $450.4 Mil.
Total Assets was $829.2 Mil.
Property, Plant and Equipment(Net PPE) was $252.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.6 Mil.
Selling, General & Admin. Expense(SGA) was $203.1 Mil.
Total Current Liabilities was $287.5 Mil.
Long-Term Debt was $139.0 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)
=(118.097 / 926.626) / (97.639 / 911.48)
=0.1274484 / 0.10712139
=1.1898

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)
=(35.381 / 911.48) / (42.215 / 926.626)
=0.2165906 / 0.19600141
=1.105

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 - (411.293 + 151.767) / 702.717) / (1 - (450.443 + 252.039) / 829.16)
=0.19873861 / 0.15277872
=1.3008

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
=926.626 / 911.48
=1.0166

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))
=(27.64 / (27.64 + 252.039)) / (25.962 / (25.962 + 151.767))
=0.09882758 / 0.14607633
=0.6765

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)
=(192.091 / 926.626) / (203.069 / 911.48)
=0.20730154 / 0.22279041
=0.9305

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)
=((158.65 + 255.999) / 702.717) / ((138.958 + 287.495) / 829.16)
=0.59006542 / 0.51431931
=1.1473

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
=(-36.776 - -2.537 - 77.395) / 702.717
=-0.1589

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.

Nacco Industries Inc has a M-score of -2.93 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.

Nacco Industries Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.91761.03421.18660.80191.19513.52760.25441.13380.93361.0631
GMI 1.05620.96821.00921.24150.75870.63481.04921.0251.09031.1497
AQI 0.96560.98710.87130.45891.11720.80131.71760.76241.16491.1791
SGI 1.13471.06071.07581.01730.63040.38330.89251.1051.06790.9615
DEPI 0.97350.96571.03510.99570.96072.23330.4771.57530.88830.6739
SGAI 0.92970.97331.01610.9491.29591.31561.09870.97830.89931.0367
LVGI 1.0020.97111.0361.19390.90331.06730.86910.87491.03231.2007
TATA -0.0271-0.0574-0.0144-0.263-0.08380.0224-0.0276-0.0397-0.0096-0.0717
M-score -2.54-2.67-2.37-4.02-3.13-0.81-3.11-2.42-2.42-2.75

Nacco Industries Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.17240.90960.93360.81221.04810.93441.06311.23151.04921.1898
GMI 1.06551.09931.09031.09521.15211.12131.14971.12771.06541.105
AQI 1.87611.14441.16490.97540.94590.91961.17911.29511.30251.3008
SGI 1.13111.13241.06791.02040.99790.97080.96150.9990.991.0166
DEPI 0.00260.76660.88831.05281.07991.07170.67390.61510.64190.6765
SGAI 0.94670.8880.89670.92570.95691.03821.03670.99710.96430.9305
LVGI 0.82430.9971.03231.11011.11431.05431.20071.12891.13911.1473
TATA -0.0208-0.0278-0.0096-0.0161-0.0043-0.0266-0.0717-0.1782-0.1864-0.1589
M-score -2.88-2.47-2.42-2.69-2.42-2.68-2.75-3.00-3.24-2.93
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