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NACCO Industries Inc (NYSE:NC)
Beneish M-Score
-3.12 (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 -3.12 suggests that the company is not a manipulator.

NC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.87   Max: -1.57
Current: -3.12

-4.87
-1.57

During the past 13 years, the highest Beneish M-Score of NACCO Industries Inc was -1.57. The lowest was -4.87. And the median was -2.59.


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 * 0.8919+0.528 * 0.859+0.404 * 1.1762+0.892 * 0.9267+0.115 * 1.0444
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1012+4.679 * -0.1034-0.327 * 0.9188
=-3.12

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $97.6 Mil.
Revenue was 220.792 + 178.007 + 173.421 + 286.519 = $858.7 Mil.
Gross Profit was 51.708 + 40.529 + 40.005 + 63.711 = $196.0 Mil.
Total Current Assets was $384.2 Mil.
Total Assets was $664.1 Mil.
Property, Plant and Equipment(Net PPE) was $124.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.3 Mil.
Selling, General & Admin. Expense(SGA) was $196.0 Mil.
Total Current Liabilities was $229.5 Mil.
Long-Term Debt was $130.5 Mil.
Net Income was -0.442 + 3.116 + 2.802 + 18.091 = $23.6 Mil.
Non Operating Income was -0.363 + -2.063 + -0.126 + 0.451 = $-2.1 Mil.
Cash Flow from Operations was 29.189 + 20.788 + -3.819 + 48.188 = $94.3 Mil.
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.



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)
=(97.613 / 858.739) / (118.097 / 926.626)
=0.11367016 / 0.1274484
=0.8919

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)
=(181.62 / 926.626) / (195.953 / 858.739)
=0.19600141 / 0.22818691
=0.859

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 - (384.249 + 124.626) / 664.11) / (1 - (411.293 + 151.767) / 702.717)
=0.23374893 / 0.19873861
=1.1762

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
=858.739 / 926.626
=0.9267

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))
=(25.962 / (25.962 + 151.767)) / (20.266 / (20.266 + 124.626))
=0.14607633 / 0.1398697
=1.0444

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)
=(196.03 / 858.739) / (192.091 / 926.626)
=0.22827658 / 0.20730154
=1.1012

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)
=((130.524 + 229.506) / 664.11) / ((158.65 + 255.999) / 702.717)
=0.54212405 / 0.59006542
=0.9188

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
=(23.567 - -2.101 - 94.346) / 664.11
=-0.1034

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 -3.12 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 local exchange's currency.

NACCO Industries Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.03421.18660.80071.19691.16240.87990.99520.93331.06310.8805
GMI 0.96821.00921.2410.75890.90211.09970.68841.09011.14971.053
AQI 0.98710.87130.43631.19060.79070.91161.43681.16461.17911.3074
SGI 1.06071.07581.02150.62781.16311.23950.26221.06790.96151.0213
DEPI 0.96571.03510.99621.0160.87751.02451.67130.93780.67390.9865
SGAI 0.97331.01610.94551.30070.94170.88261.72460.88721.03670.9557
LVGI 0.97111.0361.19420.90311.06730.92190.82471.03231.20070.9273
TATA -0.02640.0017-0.263-0.08380.0212-0.0318-0.0399-0.0096-0.0717-0.1311
M-score -2.53-2.29-4.03-3.09-2.25-2.46-3.31-2.41-2.75-3.00

NACCO Industries Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.04820.93441.06311.23151.04921.18980.88050.81840.90610.8919
GMI 1.15191.12081.14971.12771.06541.1051.0531.0120.9620.859
AQI 0.94590.91961.17911.29511.30251.30081.30741.20161.21221.1762
SGI 0.99780.97080.96150.9990.991.01661.02130.98080.96460.9267
DEPI 0.38491.11790.67390.61510.64190.67650.98651.05491.09761.0444
SGAI 0.94751.03151.03130.99530.96260.92910.95571.00451.06471.1012
LVGI 1.11431.05431.20071.12891.13911.14730.92730.9180.90830.9188
TATA -0.0043-0.0266-0.0717-0.1782-0.1864-0.1589-0.1311-0.07-0.0743-0.1034
M-score -2.50-2.67-2.75-3.00-3.24-2.93-3.00-2.87-2.85-3.12
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