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Plum Creek Timber Co Inc (NYSE:PCL)
Beneish M-Score
-2.47 (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.

Plum Creek Timber Co Inc has a M-score of -2.47 suggests that the company is not a manipulator.

PCL' s 10-Year Beneish M-Score Range
Min: -4.42   Max: 64.85
Current: -2.47

-4.42
64.85

During the past 13 years, the highest Beneish M-Score of Plum Creek Timber Co Inc was 64.85. The lowest was -4.42. And the median was -2.52.


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 Plum Creek Timber Co 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 * 1.0847+0.528 * 1.0704+0.404 * 1.3159+0.892 * 1.0141+0.115 * 1.0267
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.978+4.679 * -0.0586-0.327 * 0.9278
=-2.47

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $44 Mil.
Revenue was 356 + 317 + 331 + 366 = $1,370 Mil.
Gross Profit was 109 + 85 + 98 + 122 = $414 Mil.
Total Current Assets was $283 Mil.
Total Assets was $5,337 Mil.
Property, Plant and Equipment(Net PPE) was $4,579 Mil.
Depreciation, Depletion and Amortization(DDA) was $134 Mil.
Selling, General & Admin. Expense(SGA) was $121 Mil.
Total Current Liabilities was $292 Mil.
Long-Term Debt was $3,197 Mil.
Net Income was 55 + 30 + 40 + 72 = $197 Mil.
Non Operating Income was 15 + 14 + 12 + 16 = $57 Mil.
Cash Flow from Operations was 132 + 57 + 84 + 180 = $453 Mil.
Accounts Receivable was $40 Mil.
Revenue was 303 + 340 + 354 + 354 = $1,351 Mil.
Gross Profit was 90 + 110 + 127 + 110 = $437 Mil.
Total Current Assets was $538 Mil.
Total Assets was $4,465 Mil.
Property, Plant and Equipment(Net PPE) was $3,625 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General & Admin. Expense(SGA) was $122 Mil.
Total Current Liabilities was $548 Mil.
Long-Term Debt was $2,598 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)
=(44 / 1370) / (40 / 1351)
=0.03211679 / 0.0296077
=1.0847

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)
=(85 / 1351) / (109 / 1370)
=0.3234641 / 0.30218978
=1.0704

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 - (283 + 4579) / 5337) / (1 - (538 + 3625) / 4465)
=0.08900131 / 0.06763718
=1.3159

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
=1370 / 1351
=1.0141

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))
=(109 / (109 + 3625)) / (134 / (134 + 4579))
=0.02919122 / 0.028432
=1.0267

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)
=(121 / 1370) / (122 / 1351)
=0.08832117 / 0.09030348
=0.978

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)
=((3197 + 292) / 5337) / ((2598 + 548) / 4465)
=0.65373806 / 0.70459127
=0.9278

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
=(197 - 57 - 453) / 5337
=-0.0586

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.

Plum Creek Timber Co Inc has a M-score of -2.47 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.

Plum Creek Timber Co Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.92091.06650.88061.1171.01521.0810.64131.46310.5811.5897
GMI 0.871.06581.00271.03881.16180.90470.97250.99361.09520.9436
AQI 7.21481.08671.34451.01724.55341.15541.0610.95341.04861.1998
SGI 1.27761.03141.03241.02950.96360.80170.91960.98071.14741.0007
DEPI 0.90941.09830.86480.96990.9151.17641.10360.99370.85771.2238
SGAI 0.87421.03721.18981.09171.0461.03290.97461.13780.95381.0596
LVGI 0.92821.06931.06911.081.13421.00461.00681.02911.03270.9491
TATA -0.0555-0.011-0.0551-0.0189-0.0444-0.0803-0.0659-0.0556-0.0477-0.0437
M-score -0.09-2.39-2.75-2.45-1.25-2.93-3.17-2.39-2.91-2.06

Plum Creek Timber Co Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.9861.03371.00670.5810.9641.0190.8561.58971.12091.0847
GMI 1.00711.05541.09031.09520.94650.90820.88970.94361.06341.0704
AQI 1.00631.00111.02441.04861.00080.99120.94911.19981.32841.3159
SGI 1.07061.05541.07621.14741.09191.09041.04851.00070.98141.0141
DEPI 0.94990.86430.82890.85770.89021.00811.05571.22381.15321.0267
SGAI 1.05331.04421.04770.95381.03681.0360.9871.05961.0190.978
LVGI 1.04381.04681.03111.03271.00791.01021.02220.94910.93630.9278
TATA -0.0406-0.0429-0.0432-0.0477-0.0407-0.0506-0.0533-0.0437-0.0618-0.0586
M-score -2.64-2.61-2.59-2.91-2.67-2.68-2.90-2.06-2.47-2.47
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