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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.
During the past 13 years, the highest Beneish M-Score of China Petroleum & Chemical Corp was -0.23. The lowest was -3.29. And the median was -2.79.
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 China Petroleum & Chemical Corp 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 * 1.9412||+||0.528 * 0.8618||+||0.404 * 1.1397||+||0.892 * 0.6289||+||0.115 * 0.8132|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1235||+||4.679 * -0.0927||-||0.327 * 0.7653|
|This Year (Mar15) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $10,177 Mil.|
Revenue was 76658.384894 + 0 + 114773.376561 + 103849.829904 = $295,282 Mil.
Gross Profit was 19129.7727054 + 0 + 20288.0942445 + 20156.1639397 = $59,574 Mil.
Total Current Assets was $57,286 Mil.
Total Assets was $230,188 Mil.
Property, Plant and Equipment(Net PPE) was $138,814 Mil.
Depreciation, Depletion and Amortization(DDA) was $25,336 Mil.
Selling, General & Admin. Expense(SGA) was $14,438 Mil.
Total Current Liabilities was $77,364 Mil.
Long-Term Debt was $14,022 Mil.
Net Income was 348.155034783 + 0 + 2956.69758932 + 2287.54252389 = $5,592 Mil.
Non Operating Income was 56.9037925176 + 0 + 148.781818765 + -351.854851774 = $-146 Mil.
Cash Flow from Operations was 1071.07363832 + 23971.0112142 + 0 + 2044.54884173 = $27,087 Mil.
|Accounts Receivable was $8,337 Mil.
Revenue was 121894.468225 + 118411.764706 + 117325.236387 + 111918.101368 = $469,550 Mil.
Gross Profit was 21665.1300626 + 21645.5882353 + 18014.183241 + 20312.9525342 = $81,638 Mil.
Total Current Assets was $61,411 Mil.
Total Assets was $227,678 Mil.
Property, Plant and Equipment(Net PPE) was $136,685 Mil.
Depreciation, Depletion and Amortization(DDA) was $19,620 Mil.
Selling, General & Admin. Expense(SGA) was $20,435 Mil.
Total Current Liabilities was $94,143 Mil.
Long-Term Debt was $23,969 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)|
|=||(10177.1230725 / 295281.591359)||/||(8336.84557129 / 469549.570686)|
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)|
|=||(0 / 469549.570686)||/||(19129.7727054 / 295281.591359)|
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 - (57285.9295355 + 138814.477607) / 230188.022954)||/||(1 - (61410.9318406 + 136685.051037) / 227677.971683)|
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))|
|=||(19619.5525397 / (19619.5525397 + 136685.051037))||/||(25336.4901906 / (25336.4901906 + 138814.477607))|
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)|
|=||(14438.3480968 / 295281.591359)||/||(20435.140195 / 469549.570686)|
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)|
|=||((14022.0562306 + 77364.1522136) / 230188.022954)||/||((23969.3776753 + 94142.5749095) / 227677.971683)|
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|
|=||(5592.395148 - -146.169240491||-||27086.6336942)||/||230188.022954|
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.
China Petroleum & Chemical Corp has a M-score of -2.36 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
China Petroleum & Chemical Corp Annual Data
China Petroleum & Chemical Corp Quarterly Data