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Plum Creek Timber Co Inc (NYSE:PCL)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

PCL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.06   Max: 24.1
Current: -3.06

-3.06
24.1

During the past 13 years, the highest Beneish M-Score of Plum Creek Timber Co Inc was 24.10. The lowest was -3.06. 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 * 0.8602+0.528 * 1.0126+0.404 * 1.0327+0.892 * 0.979+0.115 * 1.0105
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3323+4.679 * -0.0816-0.327 * 1.0434
=-3.06

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $32 Mil.
Revenue was 323 + 414 + 302 + 406 = $1,445 Mil.
Gross Profit was 93 + 149 + 75 + 91 = $408 Mil.
Total Current Assets was $230 Mil.
Total Assets was $4,990 Mil.
Property, Plant and Equipment(Net PPE) was $4,304 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $150 Mil.
Total Current Liabilities was $670 Mil.
Long-Term Debt was $2,759 Mil.
Net Income was 34 + 100 + 21 + 42 = $197 Mil.
Non Operating Income was 17 + 25 + 19 + 22 = $83 Mil.
Cash Flow from Operations was 99 + 195 + 76 + 151 = $521 Mil.
Accounts Receivable was $38 Mil.
Revenue was 428 + 375 + 356 + 317 = $1,476 Mil.
Gross Profit was 119 + 109 + 109 + 85 = $422 Mil.
Total Current Assets was $310 Mil.
Total Assets was $5,187 Mil.
Property, Plant and Equipment(Net PPE) was $4,418 Mil.
Depreciation, Depletion and Amortization(DDA) was $138 Mil.
Selling, General & Admin. Expense(SGA) was $115 Mil.
Total Current Liabilities was $657 Mil.
Long-Term Debt was $2,759 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)
=(32 / 1445) / (38 / 1476)
=0.02214533 / 0.02574526
=0.8602

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)
=(422 / 1476) / (408 / 1445)
=0.28590786 / 0.28235294
=1.0126

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 - (230 + 4304) / 4990) / (1 - (310 + 4418) / 5187)
=0.09138277 / 0.08849046
=1.0327

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
=1445 / 1476
=0.979

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))
=(138 / (138 + 4418)) / (133 / (133 + 4304))
=0.03028973 / 0.02997521
=1.0105

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)
=(150 / 1445) / (115 / 1476)
=0.10380623 / 0.07791328
=1.3323

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)
=((2759 + 670) / 4990) / ((2759 + 657) / 5187)
=0.68717435 / 0.6585695
=1.0434

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 - 83 - 521) / 4990
=-0.0816

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 -3.06 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.88060.80140.69191.36070.95151.35960.68481.31721.18960.8602
GMI 1.00271.03881.16180.90470.97250.99361.09520.94361.09631.0126
AQI 1.20451.01724.55341.15541.0611.00161.00491.19181.08141.0327
SGI 1.03241.02950.96360.80170.91960.98071.14741.00071.10150.979
DEPI 0.87990.96990.9151.17641.10360.99010.86081.22380.83321.0105
SGAI 1.18981.09171.0461.03290.97461.13780.95381.05960.84881.3323
LVGI 1.06911.081.13421.00461.00681.02911.03270.94910.99091.0434
TATA -0.0551-0.0189-0.0446-0.0803-0.0659-0.0556-0.0477-0.0539-0.0708-0.0816
M-score -2.80-2.74-1.55-2.68-2.88-2.46-2.83-2.36-2.45-3.06

Plum Creek Timber Co Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.8561.31721.12091.08471.24261.18960.89890.88610.86950.8602
GMI 0.88970.94361.06341.07041.13281.09631.09671.15891.03851.0126
AQI 0.94911.19181.32841.31591.41761.08141.01851.03511.00431.0327
SGI 1.04851.00070.98141.01411.01171.10151.18831.10291.1240.979
DEPI 1.05571.22381.15321.02671.02490.83320.85880.9310.93391.0105
SGAI 0.9871.05961.0190.9780.96350.84880.83450.90671.02011.3323
LVGI 1.02220.94910.93630.92780.92670.99091.01651.03731.02441.0434
TATA -0.0533-0.0539-0.0727-0.0695-0.0633-0.0708-0.0899-0.0864-0.0943-0.0816
M-score -2.90-2.36-2.52-2.52-2.27-2.45-2.76-2.80-2.93-3.06
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