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Nacco Industries Inc (NYSE:NC)
Beneish M-Score
-2.75 (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 -2.75 suggests that the company is not a manipulator.

NC' s 10-Year Beneish M-Score Range
Min: -4.01   Max: -0.81
Current: -2.75

-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 -2.59.


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 * 1.0631+0.528 * 1.1497+0.404 * 1.1791+0.892 * 0.9615+0.115 * 0.6739
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0367+4.679 * -0.0717-0.327 * 1.2007
=-2.75

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $123.5 Mil.
Revenue was 297.285 + 221.714 + 200.37 + 177.413 = $896.8 Mil.
Gross Profit was 65.835 + 46.543 + 36.523 + 36.171 = $185.1 Mil.
Total Current Assets was $465.7 Mil.
Total Assets was $770.5 Mil.
Property, Plant and Equipment(Net PPE) was $159.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.1 Mil.
Selling, General & Admin. Expense(SGA) was $198.7 Mil.
Total Current Liabilities was $254.7 Mil.
Long-Term Debt was $191.4 Mil.
Net Income was -40.669 + 7.699 + -3.624 + -1.524 = $-38.1 Mil.
Non Operating Income was -1.982 + -0.211 + -0.455 + -0.05 = $-2.7 Mil.
Cash Flow from Operations was 17.581 + 23.63 + 4.604 + -26.016 = $19.8 Mil.
Accounts Receivable was $120.8 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 $199.3 Mil.
Total Current Liabilities was $238.1 Mil.
Long-Term Debt was $152.4 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)
=(123.466 / 896.782) / (120.789 / 932.666)
=0.13767672 / 0.12950938
=1.0631

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)
=(46.543 / 932.666) / (65.835 / 896.782)
=0.23726715 / 0.20637346
=1.1497

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 - (465.713 + 159.644) / 770.52) / (1 - (461.29 + 219.256) / 809.956)
=0.18839615 / 0.15977411
=1.1791

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
=896.782 / 932.666
=0.9615

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))
=(24.572 / (24.572 + 219.256)) / (28.07 / (28.07 + 159.644))
=0.10077596 / 0.149536
=0.6739

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)
=(198.697 / 896.782) / (199.331 / 932.666)
=0.22156667 / 0.21372174
=1.0367

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)
=((191.431 + 254.681) / 770.52) / ((152.431 + 238.119) / 809.956)
=0.57897524 / 0.48218669
=1.2007

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
=(-38.118 - -2.698 - 19.799) / 770.52
=-0.0717

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 -2.75 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 0.91761.03421.18660.80191.19513.52760.25441.13380.93361.0631
GMI 1.05620.96821.00921.24150.75870.63481.04921.0251.09031.1497
AQI 0.96560.98710.87130.45891.11720.80131.71760.76241.16491.1791
SGI 1.13471.06071.07581.01730.63040.38330.89251.1051.06790.9615
DEPI 0.97350.96571.03510.99570.96072.23330.4771.57530.88830.6739
SGAI 0.92970.97331.01610.9491.29591.31561.09870.97830.89931.0367
LVGI 1.0020.97111.0361.19390.90331.06730.86910.87491.03231.2007
TATA -0.0271-0.0574-0.0144-0.263-0.08380.0224-0.0276-0.0397-0.0096-0.0717
M-score -2.54-2.67-2.37-4.02-3.13-0.81-3.11-2.42-2.42-2.75

Nacco Industries Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.21272.90480.32870.17240.90960.93360.81221.04810.93441.0631
GMI 0.9670.76980.8491.06551.09931.09031.09521.15211.12131.1497
AQI 1.50520.76241.94111.87611.14441.16490.97540.94590.91961.1791
SGI 1.01680.43130.61641.13111.13241.06791.02040.99790.97080.9615
DEPI -0.3551.57530.34370.00260.76660.88831.05281.07991.07170.6739
SGAI 1.17151.47241.28550.94670.8880.89670.92570.95691.03821.0367
LVGI 0.83420.87490.80080.82430.9971.03231.11011.11431.05431.2007
TATA -0.0532-0.0397-0.0333-0.0208-0.0278-0.0096-0.0161-0.0043-0.0266-0.0717
M-score -3.38-1.61-3.35-2.88-2.47-2.42-2.69-2.42-2.68-2.75
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