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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 -2.42 suggests that the company is not a manipulator.
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 -2.61.
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 * 1.0481||+||0.528 * 1.1521||+||0.404 * 0.9459||+||0.892 * 0.9979||+||0.115 * 1.0799|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9586||+||4.679 * -0.0043||-||0.327 * 1.1143|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $85.0 Mil.|
Revenue was 200.37 + 177.413 + 311.983 + 228.614 = $918.4 Mil.
Gross Profit was 36.523 + 36.171 + 78.181 + 49.219 = $200.1 Mil.
Total Current Assets was $406.3 Mil.
Total Assets was $788.8 Mil.
Property, Plant and Equipment(Net PPE) was $254.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.0 Mil.
Selling, General & Admin. Expense(SGA) was $200.3 Mil.
Total Current Liabilities was $234.4 Mil.
Long-Term Debt was $147.3 Mil.
Net Income was -3.624 + -1.524 + 22.556 + 12.325 = $29.7 Mil.
Non Operating Income was -0.455 + -0.05 + -0.394 + -0.154 = $-1.1 Mil.
Cash Flow from Operations was 4.604 + -26.016 + 46.082 + 9.541 = $34.2 Mil.
|Accounts Receivable was $81.3 Mil.
Revenue was 196.017 + 196.052 + 318.183 + 210.067 = $920.3 Mil.
Gross Profit was 47.63 + 46.261 + 84.899 + 52.227 = $231.0 Mil.
Total Current Assets was $392.6 Mil.
Total Assets was $698.1 Mil.
Property, Plant and Equipment(Net PPE) was $185.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.4 Mil.
Selling, General & Admin. Expense(SGA) was $209.4 Mil.
Total Current Liabilities was $173.5 Mil.
Long-Term Debt was $129.7 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)|
|=||(85.001 / 918.38)||/||(81.271 / 920.319)|
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)|
|=||(36.171 / 920.319)||/||(36.523 / 918.38)|
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 - (406.342 + 254.362) / 788.793)||/||(1 - (392.64 + 185.626) / 698.117)|
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))|
|=||(21.427 / (21.427 + 185.626))||/||(26.96 / (26.96 + 254.362))|
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)|
|=||(200.316 / 918.38)||/||(209.406 / 920.319)|
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)|
|=||((147.257 + 234.425) / 788.793)||/||((129.687 + 173.455) / 698.117)|
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|
|=||(29.733 - -1.053||-||34.211)||/||788.793|
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 -2.42 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