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NACCO Industries Inc (NYSE:NC)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

NC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.01   Max: -0.81
Current: -3.06

-4.01
-0.81

During the past 13 years, the highest Beneish M-Score of NACCO Industries Inc was -0.81. The lowest was -4.01. And the median was -2.62.


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 * 0.8805+0.528 * 1.053+0.404 * 1.1592+0.892 * 1.0213+0.115 * 0.9865
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9557+4.679 * -0.1311-0.327 * 0.9273
=-3.06

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
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.
Net Income was 18.091 + 3.141 + -0.275 + 1.027 = $22.0 Mil.
Non Operating Income was 0.451 + -0.888 + 0.042 + 0.291 = $-0.1 Mil.
Cash Flow from Operations was 48.188 + 9.933 + 12.409 + 37.472 = $108.0 Mil.
Accounts Receivable was $123.5 Mil.
Revenue was 297.285 + 221.714 + 200.37 + 177.413 = $896.8 Mil.
Gross Profit was 65.835 + 46.543 + 36.523 + 36.171 = $185.1 Mil.
Total Current Assets was $447.1 Mil.
Total Assets was $770.5 Mil.
Property, Plant and Equipment(Net PPE) was $159.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.1 Mil.
Selling, General & Admin. Expense(SGA) was $198.7 Mil.
Total Current Liabilities was $254.7 Mil.
Long-Term Debt was $191.4 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)
=(111.02 / 915.86) / (123.466 / 896.782)
=0.1212194 / 0.13767672
=0.8805

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)
=(42.215 / 896.782) / (63.711 / 915.86)
=0.20637346 / 0.19598629
=1.053

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 - (361.434 + 132.539) / 655.408) / (1 - (447.147 + 159.644) / 770.52)
=0.24631222 / 0.21249156
=1.1592

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
=915.86 / 896.782
=1.0213

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))
=(28.07 / (28.07 + 159.644)) / (23.68 / (23.68 + 132.539))
=0.149536 / 0.15158207
=0.9865

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)
=(193.925 / 915.86) / (198.697 / 896.782)
=0.21174088 / 0.22156667
=0.9557

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)
=((160.113 + 191.746) / 655.408) / ((191.431 + 254.681) / 770.52)
=0.53685491 / 0.57897524
=0.9273

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
=(21.984 - -0.104 - 108.002) / 655.408
=-0.1311

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 -3.06 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.03421.18660.80191.19513.52760.25441.13390.93361.06310.8805
GMI 0.96821.00921.24150.75870.63481.04911.02521.09031.14971.053
AQI 0.98710.87130.45891.11720.80131.71760.76241.16491.32991.1592
SGI 1.06071.07581.01730.63040.38330.89261.10491.06790.96151.0213
DEPI 0.96571.03510.99570.96072.23330.50961.47440.88830.67390.9865
SGAI 0.97331.01610.9491.29591.31561.08740.98850.89931.03670.9557
LVGI 0.97111.0361.19390.90331.06730.86910.87491.03231.20070.9273
TATA -0.0574-0.0144-0.263-0.08380.0224-0.0277-0.0397-0.0096-0.0717-0.1311
M-score -2.67-2.37-4.02-3.13-0.81-3.10-2.43-2.42-2.69-3.06

NACCO Industries Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.90970.93360.81221.04810.93441.06311.23151.04921.18980.8805
GMI 1.09941.09031.09521.15211.12131.14971.12771.06541.1051.053
AQI 1.14441.16490.97540.94590.91961.32991.29511.30251.30081.1592
SGI 1.13231.06791.02040.99790.97080.96150.9990.991.01661.0213
DEPI 0.71270.88831.05281.07991.07170.67390.61510.64190.67650.9865
SGAI 0.89690.89670.92570.95691.03821.03670.99710.96430.93050.9557
LVGI 0.9971.03231.11011.11431.05431.20071.12891.13911.14730.9273
TATA -0.0278-0.0096-0.0161-0.0043-0.0266-0.0717-0.1782-0.1864-0.1589-0.1311
M-score -2.48-2.42-2.69-2.42-2.68-2.69-3.00-3.24-2.93-3.06
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