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EnPro Industries Inc (NYSE:NPO)
Beneish M-Score
-2.72 (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.

EnPro Industries Inc has a M-score of -2.72 suggests that the company is not a manipulator.

NPO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.59   Max: -2.14
Current: -2.72

-3.59
-2.14

During the past 13 years, the highest Beneish M-Score of EnPro Industries Inc was -2.14. The lowest was -3.59. And the median was -2.60.


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 EnPro 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 * 1.0551+0.528 * 1.018+0.404 * 0.981+0.892 * 1.0349+0.115 * 1.0506
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9779+4.679 * -0.0673-0.327 * 1.0542
=-2.72

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $232 Mil.
Revenue was 313.2 + 294.9 + 321.9 + 306.6 = $1,237 Mil.
Gross Profit was 107.9 + 97.6 + 103 + 101.4 = $410 Mil.
Total Current Assets was $556 Mil.
Total Assets was $1,592 Mil.
Property, Plant and Equipment(Net PPE) was $215 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $312 Mil.
Total Current Liabilities was $533 Mil.
Long-Term Debt was $456 Mil.
Net Income was 3.6 + -46.8 + 6.6 + 11.4 = $-25 Mil.
Non Operating Income was -2.5 + -1.6 + 0.1 + 0.1 = $-4 Mil.
Cash Flow from Operations was 25.4 + -28.4 + 54.5 + 34.4 = $86 Mil.
Accounts Receivable was $212 Mil.
Revenue was 298.4 + 277.5 + 316.4 + 302.6 = $1,195 Mil.
Gross Profit was 101.3 + 89.8 + 105.9 + 106.2 = $403 Mil.
Total Current Assets was $501 Mil.
Total Assets was $1,483 Mil.
Property, Plant and Equipment(Net PPE) was $202 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $309 Mil.
Total Current Liabilities was $236 Mil.
Long-Term Debt was $638 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)
=(231.7 / 1236.6) / (212.2 / 1194.9)
=0.18736859 / 0.17758808
=1.0551

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)
=(403.2 / 1194.9) / (409.9 / 1236.6)
=0.33743409 / 0.33147339
=1.018

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 - (556.2 + 214.6) / 1591.9) / (1 - (501.2 + 202.2) / 1483.3)
=0.51579873 / 0.5257871
=0.981

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
=1236.6 / 1194.9
=1.0349

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))
=(57.5 / (57.5 + 202.2)) / (57.3 / (57.3 + 214.6))
=0.22140932 / 0.21073924
=1.0506

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)
=(312.2 / 1236.6) / (308.5 / 1194.9)
=0.25246644 / 0.2581806
=0.9779

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)
=((455.9 + 532.9) / 1591.9) / ((638 + 236) / 1483.3)
=0.62114454 / 0.58922672
=1.0542

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
=(-25.2 - -3.9 - 85.9) / 1591.9
=-0.0673

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.

EnPro Industries Inc has a M-score of -2.72 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.

EnPro Industries Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.09581.54850.87591.10880.73331.07540.89481.06760.99721.0484
GMI 0.98320.9470.96921.03720.92831.09261.01471.01390.97511.0407
AQI 0.97840.97711.01250.88420.96851.21751.02470.93440.92591.0311
SGI 1.10711.10940.96490.8081.07721.2781.07120.96621.06560.9878
DEPI 1.0011.01550.96860.99460.81070.96740.98860.99321.03561.039
SGAI 0.96471.36281.02561.51610.68680.80830.97121.03391.04910.9595
LVGI 0.94891.03050.92821.05591.60291.01510.98681.01791.0811.1624
TATA -0.1669-0.0443-0.0316-0.19150.0574-0.032-0.0554-0.0259-0.0147-0.0687
M-score -3.07-2.19-2.77-3.58-2.60-2.15-2.75-2.60-2.57-2.78

EnPro Industries Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.06921.14091.04760.99720.92030.871.00681.04841.0161.0551
GMI 0.9961.01771.00060.97510.98880.98421.01281.04071.02691.018
AQI 0.93460.91810.86880.92591.02991.01881.05011.03110.9530.981
SGI 0.9870.98981.02651.06561.05691.03741.01740.98781.01011.0349
DEPI 1.00251.00490.98771.03561.04481.06261.11521.0391.0451.0506
SGAI 1.03771.06351.03651.04911.02980.99120.98260.95950.96880.9779
LVGI 0.94470.90441.09421.0811.2121.34481.12331.16241.081.0542
TATA -0.0225-0.0160.0077-0.0147-0.0197-0.0578-0.0764-0.0687-0.0927-0.0673
M-score -2.55-2.44-2.47-2.57-2.66-2.94-2.81-2.78-2.91-2.72
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