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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.
Enpro Industries Inc has a M-score of -2.44 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Enpro Industries Inc was -2.09. The lowest was -3.59. And the median was -2.62.
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 * 1.1409||+||0.528 * 1.0177||+||0.404 * 0.9181||+||0.892 * 0.9898||+||0.115 * 1.0049|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0635||+||4.679 * -0.016||-||0.327 * 0.9044|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|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.
Net Income was 8.3 + 1.3 + 5.2 + 5.6 = $20 Mil.
Non Operating Income was -2.5 + -4.2 + 0 + 0 = $-7 Mil.
Cash Flow from Operations was 11.2 + -25 + 31.8 + 32.6 = $51 Mil.
|Accounts Receivable was $208 Mil.
Revenue was 305.8 + 286.9 + 279.3 + 291.7 = $1,164 Mil.
Gross Profit was 109.2 + 94.2 + 91.1 + 98.8 = $393 Mil.
Total Current Assets was $428 Mil.
Total Assets was $1,401 Mil.
Property, Plant and Equipment(Net PPE) was $186 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $285 Mil.
Total Current Liabilities was $382 Mil.
Long-Term Debt was $297 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)|
|=||(235.1 / 1151.8)||/||(208.2 / 1163.7)|
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)|
|=||(96.5 / 1163.7)||/||(108.1 / 1151.8)|
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 - (523.9 + 185.6) / 1466.2)||/||(1 - (427.7 + 185.7) / 1400.8)|
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))|
|=||(57.5 / (57.5 + 185.7))||/||(57.1 / (57.1 + 185.6))|
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)|
|=||(300 / 1151.8)||/||(285 / 1163.7)|
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)|
|=||((308.8 + 333.6) / 1466.2)||/||((296.7 + 381.9) / 1400.8)|
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|
|=||(20.4 - -6.7||-||50.6)||/||1466.2|
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 -2.44 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