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Nacco Industries Inc (NYSE:NC)
Beneish M-Score
-3.24 (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 -3.24 suggests that the company is not a manipulator.

NC' s 10-Year Beneish M-Score Range
Min: -4.82   Max: -1.57
Current: -3.24

-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 -2.63.


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 * 1.0492+0.528 * 1.0654+0.404 * 1.3025+0.892 * 0.99+0.115 * 0.6419
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9626+4.679 * -0.1864-0.327 * 1.1391
=-3.24

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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 $359.6 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.
Net Income was -0.275 + 1.027 + -40.669 + 7.699 = $-32.2 Mil.
Non Operating Income was 0.042 + 0.291 + -1.982 + -0.211 = $-1.9 Mil.
Cash Flow from Operations was 12.409 + 37.472 + 17.581 + 23.63 = $91.1 Mil.
Accounts Receivable was $85.0 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.



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)
=(88.295 / 909.233) / (85.001 / 918.38)
=0.09710932 / 0.09255537
=1.0492

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)
=(38.189 / 918.38) / (35.381 / 909.233)
=0.21787713 / 0.20451083
=1.0654

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 - (359.604 + 154.02) / 651.399) / (1 - (406.342 + 254.362) / 788.793)
=0.21150631 / 0.16238608
=1.3025

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
=909.233 / 918.38
=0.99

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))
=(26.96 / (26.96 + 254.362)) / (27.032 / (27.032 + 154.02))
=0.09583324 / 0.14930517
=0.6419

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)
=(190.913 / 909.233) / (200.316 / 918.38)
=0.20997148 / 0.21811886
=0.9626

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)
=((166.239 + 192.803) / 651.399) / ((147.257 + 234.425) / 788.793)
=0.55118599 / 0.48388107
=1.1391

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
=(-32.218 - -1.86 - 91.092) / 651.399
=-0.1864

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 -3.24 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.91761.03421.18660.80191.19511.16240.87990.99520.93331.0631
GMI 1.05620.96821.00921.24150.75870.90211.09970.68841.09011.1497
AQI 0.96560.98710.87130.45891.13210.79070.91161.43681.16461.1791
SGI 1.13471.06071.07581.01730.63041.16311.23950.26221.06790.9615
DEPI 0.97350.96571.03510.99571.01650.87751.02451.67130.93780.6739
SGAI 0.92970.97331.01610.9491.29590.94170.88261.72460.88721.0367
LVGI 1.0020.97111.0361.19390.90331.06730.92190.82471.03231.2007
TATA -0.0271-0.0574-0.0144-0.263-0.08380.0212-0.0318-0.0399-0.0096-0.0717
M-score -2.54-2.67-2.37-4.02-3.11-2.25-2.46-3.31-2.41-2.75

Nacco Industries Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.45840.712.91432.24921.3581.04820.93441.06311.23151.0492
GMI 0.82130.71730.77950.84460.93461.15191.12081.14971.12771.0654
AQI 1.94111.87611.14381.16460.97540.94590.91961.17911.29511.3025
SGI 0.4420.27460.34290.44310.61030.99780.97080.96150.9990.99
DEPI 2.25453.85980.9840.93780.73920.38491.11790.67390.61510.6419
SGAI 1.36951.62151.4211.28211.13780.94751.03151.03130.99530.9626
LVGI 0.80080.82430.9971.03231.11011.11431.05431.20071.12891.1391
TATA -0.0339-0.0212-0.0281-0.0096-0.0161-0.0043-0.0266-0.0717-0.1782-0.1864
M-score -3.20-3.01-1.57-1.95-2.71-2.50-2.67-2.75-3.00-3.24
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