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Plum Creek Timber Co Inc (NYSE:PCL)
Beneish M-Score
-2.22 (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 -2.22 suggests that the company is not a manipulator.

PCL' s 10-Year Beneish M-Score Range
Min: -4.28   Max: 24.1
Current: -2.22

-4.28
24.1

During the past 13 years, the highest Beneish M-Score of Plum Creek Timber Co Inc was 24.10. The lowest was -4.28. And the median was -2.53.


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 * 1.2426+0.528 * 1.1328+0.404 * 1.4176+0.892 * 1.0117+0.115 * 1.0249
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9635+4.679 * -0.0523-0.327 * 0.9267
=-2.22

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $44 Mil.
Revenue was 375 + 356 + 317 + 331 = $1,379 Mil.
Gross Profit was 109 + 109 + 85 + 98 = $401 Mil.
Total Current Assets was $248 Mil.
Total Assets was $5,277 Mil.
Property, Plant and Equipment(Net PPE) was $4,567 Mil.
Depreciation, Depletion and Amortization(DDA) was $134 Mil.
Selling, General & Admin. Expense(SGA) was $116 Mil.
Total Current Liabilities was $294 Mil.
Long-Term Debt was $3,198 Mil.
Net Income was 61 + 55 + 30 + 40 = $186 Mil.
Non Operating Income was 15 + 15 + 14 + 12 = $56 Mil.
Cash Flow from Operations was 133 + 132 + 57 + 84 = $406 Mil.
Accounts Receivable was $35 Mil.
Revenue was 366 + 303 + 340 + 354 = $1,363 Mil.
Gross Profit was 122 + 90 + 110 + 127 = $449 Mil.
Total Current Assets was $590 Mil.
Total Assets was $4,631 Mil.
Property, Plant and Equipment(Net PPE) was $3,755 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $119 Mil.
Total Current Liabilities was $709 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 / 1379) / (35 / 1363)
=0.03190718 / 0.02567865
=1.2426

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)
=(109 / 1363) / (109 / 1379)
=0.3294204 / 0.29079043
=1.1328

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 - (248 + 4567) / 5277) / (1 - (590 + 3755) / 4631)
=0.08754974 / 0.06175772
=1.4176

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
=1379 / 1363
=1.0117

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))
=(113 / (113 + 3755)) / (134 / (134 + 4567))
=0.02921406 / 0.02850457
=1.0249

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)
=(116 / 1379) / (119 / 1363)
=0.08411893 / 0.08730741
=0.9635

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)
=((3198 + 294) / 5277) / ((2598 + 709) / 4631)
=0.66173962 / 0.71410063
=0.9267

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
=(186 - 56 - 406) / 5277
=-0.0523

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 -2.22 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 0.92091.06650.88060.80140.69191.36070.95151.35960.68481.3172
GMI 0.871.06581.00271.03881.16180.90470.97250.99361.09520.9436
AQI 1.1691.21311.20451.01724.55341.15541.0611.00161.00491.1918
SGI 1.27761.03141.03241.02950.96360.80170.91960.98071.14741.0007
DEPI 0.91771.07950.87990.96990.9151.17641.10360.99010.86081.2238
SGAI 0.87421.03721.18981.09171.0461.03290.97461.13780.95381.0596
LVGI 0.9351.06931.06911.081.13421.00461.00681.02911.03270.9491
TATA -0.0514-0.011-0.0551-0.0189-0.0446-0.0803-0.0659-0.0556-0.0477-0.0437
M-score -2.51-2.34-2.80-2.74-1.55-2.68-2.88-2.46-2.83-2.31

Plum Creek Timber Co Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.03371.00670.68480.9641.0190.8561.31721.12091.08471.2426
GMI 1.05541.09031.09520.94650.90820.88970.94361.06341.07041.1328
AQI 1.00111.02441.00491.00080.99120.94911.19181.32841.31591.4176
SGI 1.05541.07621.14741.09191.09041.04851.00070.98141.01411.0117
DEPI 0.86430.82890.86080.89021.00811.05571.22381.15321.02671.0249
SGAI 1.04421.04770.95381.03681.0360.9871.05961.0190.9780.9635
LVGI 1.04681.03111.03271.00791.01021.02220.94910.93630.92780.9267
TATA -0.0429-0.0432-0.0477-0.0407-0.0506-0.0533-0.0437-0.0618-0.0586-0.0523
M-score -2.61-2.59-2.83-2.67-2.68-2.90-2.31-2.47-2.47-2.22
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