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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.
During the past 13 years, the highest Beneish M-Score of Enpro Industries Inc was -1.89. The lowest was -3.59. And the median was -2.58.
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 * 0.87||+||0.528 * 0.9842||+||0.404 * 1.0188||+||0.892 * 1.0374||+||0.115 * 1.0626|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0876||+||4.679 * -0.0578||-||0.327 * 1.3448|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|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 $339 Mil.
Total Current Liabilities was $236 Mil.
Long-Term Debt was $638 Mil.
Net Income was -37.3 + -1.6 + 3.8 + 8.6 = $-27 Mil.
Non Operating Income was -0.2 + -4.1 + 24 + -4 = $16 Mil.
Cash Flow from Operations was 19.1 + -21.5 + 42.1 + 3.9 = $44 Mil.
|Accounts Receivable was $235 Mil.
Revenue was 313.1 + 287.2 + 275.5 + 276 = $1,152 Mil.
Gross Profit was 108.1 + 96.5 + 85.8 + 92.1 = $383 Mil.
Total Current Assets was $524 Mil.
Total Assets was $1,466 Mil.
Property, Plant and Equipment(Net PPE) was $186 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $300 Mil.
Total Current Liabilities was $334 Mil.
Long-Term Debt was $309 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(212.2 / 1194.9)||/||(235.1 / 1151.8)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(89.8 / 1151.8)||/||(101.3 / 1194.9)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (501.2 + 202.2) / 1483.3)||/||(1 - (523.9 + 185.6) / 1466.2)|
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.
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))|
|=||(57.1 / (57.1 + 185.6))||/||(57.5 / (57.5 + 202.2))|
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)|
|=||(338.5 / 1194.9)||/||(300 / 1151.8)|
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)|
|=||((638 + 236) / 1483.3)||/||((308.8 + 333.6) / 1466.2)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-26.5 - 15.7||-||43.6)||/||1483.3|
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 -2.96 suggests that the company will not be a manipulator.
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
Enpro Industries Inc Annual Data
Enpro Industries Inc Quarterly Data