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Plum Creek Timber Co Inc (NYSE:PCL)
Beneish M-Score
-2.29 (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 -2.29 suggests that the company is not a manipulator.

PCL' s 10-Year Beneish M-Score Range
Min: -3.18   Max: 23.93
Current: -2.29

-3.18
23.93

During the past 13 years, the highest Beneish M-Score of Plum Creek Timber Co Inc was 23.93. The lowest was -3.18. And the median was -2.57.


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 * 1.3451+0.528 * 0.9436+0.404 * 1.1918+0.892 * 1.0007+0.115 * 1.2238
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0596+4.679 * -0.0437-0.327 * 0.9491
=-2.29

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $35 Mil.
Revenue was 331 + 366 + 303 + 340 = $1,340 Mil.
Gross Profit was 98 + 122 + 90 + 110 = $420 Mil.
Total Current Assets was $633 Mil.
Total Assets was $5,695 Mil.
Property, Plant and Equipment(Net PPE) was $4,596 Mil.
Depreciation, Depletion and Amortization(DDA) was $119 Mil.
Selling, General & Admin. Expense(SGA) was $123 Mil.
Total Current Liabilities was $588 Mil.
Long-Term Debt was $3,197 Mil.
Net Income was 40 + 72 + 46 + 56 = $214 Mil.
Non Operating Income was 12 + 16 + 17 + 14 = $59 Mil.
Cash Flow from Operations was 84 + 180 + 139 + 1 = $404 Mil.
Accounts Receivable was $26 Mil.
Revenue was 354 + 354 + 294 + 337 = $1,339 Mil.
Gross Profit was 127 + 110 + 81 + 78 = $396 Mil.
Total Current Assets was $506 Mil.
Total Assets was $4,384 Mil.
Property, Plant and Equipment(Net PPE) was $3,577 Mil.
Depreciation, Depletion and Amortization(DDA) was $114 Mil.
Selling, General & Admin. Expense(SGA) was $116 Mil.
Total Current Liabilities was $472 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)
=(35 / 1340) / (26 / 1339)
=0.0261194 / 0.01941748
=1.3451

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)
=(122 / 1339) / (98 / 1340)
=0.29574309 / 0.31343284
=0.9436

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 - (633 + 4596) / 5695) / (1 - (506 + 3577) / 4384)
=0.08182616 / 0.06865876
=1.1918

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
=1340 / 1339
=1.0007

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))
=(114 / (114 + 3577)) / (119 / (119 + 4596))
=0.03088594 / 0.0252386
=1.2238

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)
=(123 / 1340) / (116 / 1339)
=0.09179104 / 0.08663181
=1.0596

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 + 588) / 5695) / ((2598 + 472) / 4384)
=0.66461809 / 0.70027372
=0.9491

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
=(214 - 59 - 404) / 5695
=-0.0437

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 -2.29 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 0.92091.06650.88061.1171.01521.0810.64131.24140.80931.3451
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 -2.51-2.34-2.80-2.45-1.25-2.93-3.17-2.57-2.71-2.29

Plum Creek Timber Co Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.0171.24140.9861.03371.00670.80930.9641.0190.8561.3451
GMI 0.9830.99361.00711.05541.09031.09520.94650.90820.88970.9436
AQI 0.07411.00161.00631.00111.02441.00491.00080.99120.94911.1918
SGI 1.10620.98071.07061.05541.07621.14741.09191.09041.04851.0007
DEPI 15.39030.99010.94990.86430.82890.86080.89021.00811.05571.2238
SGAI 0.91291.13781.05331.04421.04770.95381.03681.0360.9871.0596
LVGI 1.01971.02911.04381.04681.03111.03271.00791.01021.02220.9491
TATA -0.0663-0.0556-0.0406-0.0429-0.0432-0.0477-0.0407-0.0506-0.0533-0.0437
M-score -1.40-2.57-2.64-2.61-2.59-2.71-2.67-2.68-2.90-2.29
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