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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 NACCO Industries Inc was -0.81. The lowest was -4.03. And the median was -2.57.
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 * 1.1314||+||0.528 * 0.8154||+||0.404 * 0.9435||+||0.892 * 0.9351||+||0.115 * 1.1821|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0913||+||4.679 * -0.094||-||0.327 * 0.954|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $117.5 Mil.|
Revenue was 284.218 + 220.792 + 178.007 + 173.421 = $856.4 Mil.
Gross Profit was 73.611 + 51.708 + 40.529 + 40.005 = $205.9 Mil.
Total Current Assets was $381.7 Mil.
Total Assets was $668.0 Mil.
Property, Plant and Equipment(Net PPE) was $131.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.3 Mil.
Selling, General & Admin. Expense(SGA) was $197.9 Mil.
Total Current Liabilities was $221.8 Mil.
Long-Term Debt was $120.3 Mil.
Net Income was 24.131 + -0.442 + 3.116 + 2.802 = $29.6 Mil.
Non Operating Income was 0.999 + -0.363 + -2.063 + -0.126 = $-1.6 Mil.
Cash Flow from Operations was 47.777 + 29.189 + 20.788 + -3.819 = $93.9 Mil.
|Accounts Receivable was $111.0 Mil.
Revenue was 286.519 + 239.107 + 196.5 + 193.734 = $915.9 Mil.
Gross Profit was 63.711 + 42.215 + 35.381 + 38.189 = $179.5 Mil.
Total Current Assets was $361.4 Mil.
Total Assets was $655.4 Mil.
Property, Plant and Equipment(Net PPE) was $132.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.7 Mil.
Selling, General & Admin. Expense(SGA) was $193.9 Mil.
Total Current Liabilities was $191.7 Mil.
Long-Term Debt was $160.1 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)|
|=||(117.463 / 856.438)||/||(111.02 / 915.86)|
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)|
|=||(179.496 / 915.86)||/||(205.853 / 856.438)|
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 - (381.732 + 131.049) / 668.021)||/||(1 - (361.434 + 132.539) / 655.408)|
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))|
|=||(23.68 / (23.68 + 132.539))||/||(19.276 / (19.276 + 131.049))|
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)|
|=||(197.903 / 856.438)||/||(193.925 / 915.86)|
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)|
|=||((120.295 + 221.828) / 668.021)||/||((160.113 + 191.746) / 655.408)|
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|
|=||(29.607 - -1.553||-||93.935)||/||668.021|
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 -2.96 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