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Nacco Industries Inc (NYSE:NC)
Beneish M-Score
-2.45 (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 -2.37 suggests that the company is not a manipulator.

NC' s 10-Year Beneish M-Score Range
Min: -4.82   Max: -0.81
Current: -2.45

-4.82
-0.81

During the past 13 years, the highest Beneish M-Score of Nacco Industries Inc was -0.81. The lowest was -4.82. And the median was -2.61.


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 * 1.1025+0.528 * 1.1521+0.404 * 0.9459+0.892 * 0.9979+0.115 * 1.0799
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9586+4.679 * -0.0043-0.327 * 1.1143
=-2.37

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $121.4 Mil.
Revenue was 200.37 + 177.413 + 311.983 + 228.614 = $918.4 Mil.
Gross Profit was 36.523 + 36.171 + 78.181 + 49.219 = $200.1 Mil.
Total Current Assets was $406.3 Mil.
Total Assets was $788.8 Mil.
Property, Plant and Equipment(Net PPE) was $254.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.0 Mil.
Selling, General & Admin. Expense(SGA) was $200.3 Mil.
Total Current Liabilities was $234.4 Mil.
Long-Term Debt was $147.3 Mil.
Net Income was -3.624 + -1.524 + 22.556 + 12.325 = $29.7 Mil.
Non Operating Income was -0.455 + -0.05 + -0.394 + -0.154 = $-1.1 Mil.
Cash Flow from Operations was 4.604 + -26.016 + 46.082 + 9.541 = $34.2 Mil.
Accounts Receivable was $110.3 Mil.
Revenue was 196.017 + 196.052 + 318.183 + 210.067 = $920.3 Mil.
Gross Profit was 47.63 + 46.261 + 84.899 + 52.227 = $231.0 Mil.
Total Current Assets was $392.6 Mil.
Total Assets was $698.1 Mil.
Property, Plant and Equipment(Net PPE) was $185.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.4 Mil.
Selling, General & Admin. Expense(SGA) was $209.4 Mil.
Total Current Liabilities was $173.5 Mil.
Long-Term Debt was $129.7 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)
=(121.352 / 918.38) / (110.3 / 920.319)
=0.13213702 / 0.11984975
=1.1025

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)
=(36.171 / 920.319) / (36.523 / 918.38)
=0.2510184 / 0.21787713
=1.1521

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 - (406.342 + 254.362) / 788.793) / (1 - (392.64 + 185.626) / 698.117)
=0.16238608 / 0.17167753
=0.9459

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
=918.38 / 920.319
=0.9979

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))
=(21.427 / (21.427 + 185.626)) / (26.96 / (26.96 + 254.362))
=0.10348558 / 0.09583324
=1.0799

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)
=(200.316 / 918.38) / (209.406 / 920.319)
=0.21811886 / 0.22753632
=0.9586

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)
=((147.257 + 234.425) / 788.793) / ((129.687 + 173.455) / 698.117)
=0.48388107 / 0.43422807
=1.1143

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
=(29.733 - -1.053 - 34.211) / 788.793
=-0.0043

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 -2.37 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.70651.50510.21933.43740.42940.2341.13270.96230.88981.1025
GMI 1.20230.84940.9670.76980.8491.06551.09931.09031.09521.1521
AQI 0.87180.93281.50520.76241.94111.87611.14441.16490.97540.9459
SGI 1.35370.63281.01680.43130.61641.13111.13241.06791.02040.9979
DEPI 1.9004213.1774-0.3551.57530.34370.00260.76660.88831.05281.0799
SGAI 0.90481.36121.17151.47241.28550.94670.88820.89830.92740.9586
LVGI 0.90750.90580.83420.87490.80080.82430.9971.03231.11011.1143
TATA -0.0249-0.0134-0.0532-0.0397-0.0333-0.0208-0.0278-0.0096-0.0161-0.0043
M-score -2.3521.86-3.38-1.12-3.26-2.82-2.27-2.39-2.62-2.37
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