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Nacco Industries Inc (NYSE:NC)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

NC' s 10-Year Beneish M-Score Range
Min: -4.82   Max: -1.57
Current: -2.67

-4.82
-1.57

During the past 13 years, the highest Beneish M-Score of Nacco Industries Inc was -1.57. The lowest was -4.82. 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 * 0.9344+0.528 * 1.1208+0.404 * 0.9196+0.892 * 0.9708+0.115 * 1.1179
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0315+4.679 * -0.0266-0.327 * 1.0543
=-2.67

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $97.6 Mil.
Revenue was 221.714 + 200.37 + 177.413 + 311.983 = $911.5 Mil.
Gross Profit was 46.543 + 36.523 + 36.171 + 78.181 = $197.4 Mil.
Total Current Assets was $450.4 Mil.
Total Assets was $829.2 Mil.
Property, Plant and Equipment(Net PPE) was $252.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.6 Mil.
Selling, General & Admin. Expense(SGA) was $203.4 Mil.
Total Current Liabilities was $287.5 Mil.
Long-Term Debt was $139.0 Mil.
Net Income was 7.699 + -3.624 + -1.524 + 22.556 = $25.1 Mil.
Non Operating Income was -0.211 + -0.455 + -0.05 + -0.394 = $-1.1 Mil.
Cash Flow from Operations was 23.63 + 4.604 + -26.016 + 46.082 = $48.3 Mil.
Accounts Receivable was $107.6 Mil.
Revenue was 228.614 + 196.017 + 196.052 + 318.2 = $938.9 Mil.
Gross Profit was 49.219 + 47.63 + 46.261 + 84.8 = $227.9 Mil.
Total Current Assets was $455.0 Mil.
Total Assets was $778.1 Mil.
Property, Plant and Equipment(Net PPE) was $193.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.1 Mil.
Selling, General & Admin. Expense(SGA) was $203.1 Mil.
Total Current Liabilities was $250.5 Mil.
Long-Term Debt was $129.1 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)
=(97.639 / 911.48) / (107.63 / 938.883)
=0.10712139 / 0.11463622
=0.9344

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)
=(36.523 / 938.883) / (46.543 / 911.48)
=0.2427459 / 0.2165906
=1.1208

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 - (450.443 + 252.039) / 829.16) / (1 - (454.955 + 193.864) / 778.089)
=0.15277872 / 0.16613781
=0.9196

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
=911.48 / 938.883
=0.9708

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))
=(24.077 / (24.077 + 193.864)) / (27.64 / (27.64 + 252.039))
=0.11047485 / 0.09882758
=1.1179

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)
=(203.372 / 911.48) / (203.092 / 938.883)
=0.22312283 / 0.21631236
=1.0315

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)
=((138.958 + 287.495) / 829.16) / ((129.123 + 250.468) / 778.089)
=0.51431931 / 0.48785036
=1.0543

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
=(25.107 - -1.11 - 48.3) / 829.16
=-0.0266

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 -2.67 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 0.97360.91761.03421.18660.80191.19511.16240.87990.99520.9333
GMI 1.09951.05620.96821.00921.24150.75870.90211.09970.68841.0901
AQI 0.91970.96560.98710.87130.45891.13210.79070.91161.43681.1646
SGI 1.12541.13471.06071.07581.01730.63041.16311.23950.26221.0679
DEPI 1.08620.97350.96571.03510.99571.01650.87751.02451.67130.9378
SGAI 0.96410.92970.97331.01610.9491.29590.94170.88261.72460.8872
LVGI 1.02221.0020.97111.0361.19390.90331.06730.92190.82471.0323
TATA -0.0596-0.0271-0.0574-0.0144-0.263-0.08380.0212-0.0318-0.0399-0.0096
M-score -2.64-2.54-2.67-2.37-4.02-3.11-2.25-2.46-3.31-2.41

Nacco Industries Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87750.26430.41290.45840.712.91432.24921.3581.04820.9344
GMI 1.02890.94310.88850.82130.71730.77950.84460.93461.15191.1208
AQI 0.93281.50611.43681.94111.87611.14381.16460.97540.94590.9196
SGI 1.08540.84350.63190.4420.27460.34290.44310.61030.99780.9708
DEPI 1.11.47561.67132.25453.85980.9840.93780.73920.38491.1179
SGAI 0.96031.06871.19961.36951.62151.4211.28211.13780.94751.0315
LVGI 0.90580.83410.82470.80080.82430.9971.03231.11011.11431.0543
TATA -0.0171-0.0591-0.0415-0.0339-0.0212-0.0281-0.0096-0.0161-0.0043-0.0266
M-score -2.56-3.30-3.32-3.20-3.01-1.57-1.95-2.71-2.50-2.67
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