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Nacco Industries, Inc. (NYSE:NC)
Beneish M-Score
-2.39 (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 -2.39 suggests that the company is not a manipulator.

NC' s 10-Year Beneish M-Score Range
Min: -4.01   Max: -0.81
Current: -2.39

-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 -2.58.


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 * 0.9623+0.528 * 1.0903+0.404 * 1.1649+0.892 * 1.0679+0.115 * 0.8883
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9014+4.679 * -0.0096-0.327 * 1.0323
=-2.39

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $153.4 Mil.
Revenue was 311.983 + 228.614 + 196.017 + 196.052 = $932.7 Mil.
Gross Profit was 78.181 + 49.219 + 47.63 + 46.261 = $221.3 Mil.
Total Current Assets was $461.3 Mil.
Total Assets was $810.0 Mil.
Property, Plant and Equipment(Net PPE) was $219.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.6 Mil.
Selling, General & Admin. Expense(SGA) was $200.4 Mil.
Total Current Liabilities was $238.1 Mil.
Long-Term Debt was $152.4 Mil.
Net Income was 22.556 + 12.325 + 5.147 + 4.422 = $44.5 Mil.
Non Operating Income was -0.394 + -0.154 + -0.412 + 0.119 = $-0.8 Mil.
Cash Flow from Operations was 46.082 + 9.541 + 22.468 + -25.026 = $53.1 Mil.
Accounts Receivable was $149.3 Mil.
Revenue was 318.183 + 210.067 + 171.435 + 173.679 = $873.4 Mil.
Gross Profit was 84.899 + 52.227 + 43.297 + 45.519 = $225.9 Mil.
Total Current Assets was $486.8 Mil.
Total Assets was $776.3 Mil.
Property, Plant and Equipment(Net PPE) was $183.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.0 Mil.
Selling, General & Admin. Expense(SGA) was $208.2 Mil.
Total Current Liabilities was $227.2 Mil.
Long-Term Debt was $135.4 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)
=(153.425 / 932.666) / (149.291 / 873.364)
=0.16450155 / 0.17093789
=0.9623

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)
=(49.219 / 873.364) / (78.181 / 932.666)
=0.25870313 / 0.23726715
=1.0903

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 - (461.29 + 219.256) / 809.956) / (1 - (486.842 + 182.985) / 776.306)
=0.15977411 / 0.13716112
=1.1649

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
=932.666 / 873.364
=1.0679

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))
=(17.992 / (17.992 + 182.985)) / (24.572 / (24.572 + 219.256))
=0.08952268 / 0.10077596
=0.8883

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)
=(200.372 / 932.666) / (208.162 / 873.364)
=0.21483789 / 0.23834507
=0.9014

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)
=((152.431 + 238.119) / 809.956) / ((135.448 + 227.169) / 776.306)
=0.48218669 / 0.46710575
=1.0323

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
=(44.45 - -0.841 - 53.065) / 809.956
=-0.0096

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 -2.39 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97360.91761.03421.18660.80191.19513.52760.26491.34170.9623
GMI 1.09951.05620.96821.00921.24150.75870.63481.04921.0251.0903
AQI 0.91970.96560.98710.87130.45891.11720.80131.71760.76241.1649
SGI 1.12541.13471.06071.07581.01730.63040.38330.89251.1051.0679
DEPI 1.08620.97350.96571.03510.99570.96072.23330.4771.57530.8883
SGAI 0.96410.92970.97331.01610.9491.29591.31561.09870.97830.8993
LVGI 1.02221.0020.97111.0361.19390.90331.06730.86910.87491.0323
TATA -0.0596-0.0271-0.0574-0.0144-0.263-0.08380.0224-0.0276-0.0397-0.0096
M-score -2.64-2.54-2.67-2.37-4.02-3.13-0.81-3.10-2.23-2.39

Nacco Industries, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 3.61310.10340.70651.50510.21933.43740.42940.2341.13270.9623
GMI 0.7631.3971.20230.84940.9670.76980.8491.06551.09931.0903
AQI 0.91331.71760.87180.93281.50520.76241.94111.87611.14441.1649
SGI 0.3252.28661.35370.63281.01680.43130.61641.13111.13241.0679
DEPI -6.39070.4771.9004213.1774-0.32871.57530.34370.00260.73350.8883
SGAI 1.25830.73180.90481.36121.17151.47241.28980.94990.89130.9014
LVGI 0.94840.86910.90750.90580.83420.87490.80080.82430.9971.0323
TATA -0.0076-0.0288-0.0249-0.0134-0.0532-0.0397-0.0333-0.0208-0.0278-0.0096
M-score -1.75-1.76-2.3521.86-3.37-1.12-3.26-2.83-2.27-2.39
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