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NACCO Industries Inc (NYSE:NC)
Beneish M-Score
-2.91 (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 -2.91 suggests that the company is not a manipulator.

NC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.88   Max: -0.81
Current: -2.91

-4.88
-0.81

During the past 13 years, the highest Beneish M-Score of NACCO Industries Inc was -0.81. The lowest was -4.88. And the median was -2.58.


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 * 0.9061+0.528 * 0.962+0.404 * 1.0605+0.892 * 0.9646+0.115 * 1.0976
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0647+4.679 * -0.0743-0.327 * 0.9083
=-2.91

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $77.2 Mil.
Revenue was 178.007 + 173.421 + 286.519 + 239.107 = $877.1 Mil.
Gross Profit was 40.529 + 40.005 + 63.711 + 42.215 = $186.5 Mil.
Total Current Assets was $321.0 Mil.
Total Assets was $609.5 Mil.
Property, Plant and Equipment(Net PPE) was $132.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.8 Mil.
Selling, General & Admin. Expense(SGA) was $196.1 Mil.
Total Current Liabilities was $161.7 Mil.
Long-Term Debt was $143.5 Mil.
Net Income was 3.116 + 2.802 + 18.091 + 3.141 = $27.2 Mil.
Non Operating Income was -2.063 + -0.126 + 0.451 + -0.888 = $-2.6 Mil.
Cash Flow from Operations was 20.788 + -3.819 + 48.188 + 9.933 = $75.1 Mil.
Accounts Receivable was $88.3 Mil.
Revenue was 196.5 + 193.734 + 297.285 + 221.714 = $909.2 Mil.
Gross Profit was 35.381 + 38.189 + 65.835 + 46.543 = $185.9 Mil.
Total Current Assets was $339.9 Mil.
Total Assets was $651.4 Mil.
Property, Plant and Equipment(Net PPE) was $154.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.0 Mil.
Selling, General & Admin. Expense(SGA) was $190.9 Mil.
Total Current Liabilities was $192.8 Mil.
Long-Term Debt was $166.2 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)
=(77.173 / 877.054) / (88.295 / 909.233)
=0.08799116 / 0.09710932
=0.9061

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)
=(185.948 / 909.233) / (186.46 / 877.054)
=0.20451083 / 0.21259808
=0.962

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 - (320.964 + 132.29) / 609.523) / (1 - (339.899 + 154.02) / 651.399)
=0.25637917 / 0.24175659
=1.0605

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
=877.054 / 909.233
=0.9646

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))
=(27.032 / (27.032 + 154.02)) / (20.829 / (20.829 + 132.29))
=0.14930517 / 0.13603145
=1.0976

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)
=(196.077 / 877.054) / (190.913 / 909.233)
=0.2235632 / 0.20997148
=1.0647

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)
=((143.471 + 161.684) / 609.523) / ((166.239 + 192.803) / 651.399)
=0.50064559 / 0.55118599
=0.9083

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
=(27.15 - -2.626 - 75.09) / 609.523
=-0.0743

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 -2.91 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 -0.02640.0017-0.263-0.08380.0224-0.0277-0.0397-0.0096-0.0717-0.1311
M-score -2.53-2.29-4.02-3.13-0.81-3.10-2.43-2.42-2.69-3.06

NACCO Industries Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.81221.04810.93441.06311.23151.04921.18980.88050.81840.9061
GMI 1.09521.15211.12131.14971.12771.06541.1051.0531.0120.962
AQI 0.97540.94590.91961.32991.45521.48881.30081.15921.06941.0605
SGI 1.02040.99790.97080.96150.9990.991.01661.02130.98080.9646
DEPI 1.05281.07991.07170.67390.61510.64190.67650.98651.05491.0976
SGAI 0.92570.95691.03821.03670.99710.96430.93050.95571.00451.0647
LVGI 1.11011.11431.05431.20071.12891.13911.14730.92730.9180.9083
TATA -0.0161-0.0043-0.0266-0.0717-0.1782-0.1864-0.1589-0.1311-0.07-0.0743
M-score -2.69-2.42-2.68-2.69-2.94-3.16-2.93-3.06-2.93-2.91
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