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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.
Nacco Industries Inc has a M-score of -2.62 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Nacco Industries Inc was -0.81. The lowest was -4.82. 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 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 * 0.8898||+||0.528 * 1.0952||+||0.404 * 0.9754||+||0.892 * 1.0204||+||0.115 * 1.0528|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9273||+||4.679 * -0.0161||-||0.327 * 1.1101|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $107.0 Mil.|
Revenue was 177.413 + 311.983 + 228.614 + 196.017 = $914.0 Mil.
Gross Profit was 36.171 + 78.181 + 49.219 + 47.63 = $211.2 Mil.
Total Current Assets was $403.2 Mil.
Total Assets was $780.0 Mil.
Property, Plant and Equipment(Net PPE) was $245.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.2 Mil.
Selling, General & Admin. Expense(SGA) was $197.8 Mil.
Total Current Liabilities was $202.1 Mil.
Long-Term Debt was $168.1 Mil.
Net Income was -1.524 + 22.556 + 12.325 + 5.147 = $38.5 Mil.
Non Operating Income was -0.05 + -0.394 + -0.154 + -0.412 = $-1.0 Mil.
Cash Flow from Operations was -26.016 + 46.082 + 9.541 + 22.468 = $52.1 Mil.
|Accounts Receivable was $117.9 Mil.
Revenue was 196.052 + 318.183 + 210.067 + 171.435 = $895.7 Mil.
Gross Profit was 46.261 + 84.899 + 52.227 + 43.297 = $226.7 Mil.
Total Current Assets was $406.9 Mil.
Total Assets was $713.7 Mil.
Property, Plant and Equipment(Net PPE) was $184.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.0 Mil.
Selling, General & Admin. Expense(SGA) was $209.0 Mil.
Total Current Liabilities was $181.3 Mil.
Long-Term Debt was $123.8 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)|
|=||(107.035 / 914.027)||/||(117.882 / 895.737)|
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)|
|=||(78.181 / 895.737)||/||(36.171 / 914.027)|
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 - (403.237 + 245.858) / 780)||/||(1 - (406.862 + 184.062) / 713.728)|
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))|
|=||(19.954 / (19.954 + 184.062))||/||(25.179 / (25.179 + 245.858))|
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)|
|=||(197.81 / 914.027)||/||(209.042 / 895.737)|
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)|
|=||((168.069 + 202.061) / 780)||/||((123.839 + 181.251) / 713.728)|
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|
|=||(38.504 - -1.01||-||52.075)||/||780|
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 -2.62 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
Nacco Industries Inc Annual Data
Nacco Industries Inc Quarterly Data