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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 -2.80.
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 * 1.0883||+||0.528 * 0.9459||+||0.404 * 1.2062||+||0.892 * 1.001||+||0.115 * 0.6555|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1139||+||4.679 * -0.0712||-||0.327 * 1.0725|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $15,521 Mil.|
Revenue was 114773.376561 + 103849.829904 + 121894.468225 + 118411.764706 = $458,929 Mil.
Gross Profit was 20288.0942445 + 20156.1639397 + 21665.1300626 + 21645.5882353 = $83,755 Mil.
Total Current Assets was $67,526 Mil.
Total Assets was $229,439 Mil.
Property, Plant and Equipment(Net PPE) was $130,655 Mil.
Depreciation, Depletion and Amortization(DDA) was $20,277 Mil.
Selling, General & Admin. Expense(SGA) was $20,982 Mil.
Total Current Liabilities was $97,094 Mil.
Long-Term Debt was $21,735 Mil.
Net Income was 2956.69758932 + 2287.54252389 + 2277.2472835 + 3597.87581699 = $11,119 Mil.
Non Operating Income was 148.781818765 + -351.854851774 + 492.426736911 + 213.725490196 = $503 Mil.
Cash Flow from Operations was 0 + 2044.54884173 + 11900.0658545 + 13008.496732 = $26,953 Mil.
|Accounts Receivable was $14,246 Mil.
Revenue was 117325.236387 + 111918.101368 + 122136.852238 + 107071.835443 = $458,452 Mil.
Gross Profit was 18014.183241 + 20312.9525342 + 21440.0770095 + 19376.8987342 = $79,144 Mil.
Total Current Assets was $59,526 Mil.
Total Assets was $207,644 Mil.
Property, Plant and Equipment(Net PPE) was $124,666 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,038 Mil.
Selling, General & Admin. Expense(SGA) was $18,817 Mil.
Total Current Liabilities was $83,201 Mil.
Long-Term Debt was $17,071 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)|
|=||(15520.6561166 / 458929.439396)||/||(14246.1688947 / 458452.025436)|
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)|
|=||(20156.1639397 / 458452.025436)||/||(20288.0942445 / 458929.439396)|
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 - (67526.0809553 + 130654.993099) / 229439.058839)||/||(1 - (59525.595044 + 124665.960222) / 207643.951744)|
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))|
|=||(12038.2816056 / (12038.2816056 + 124665.960222))||/||(20276.6246184 / (20276.6246184 + 130654.993099))|
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)|
|=||(20982.4135719 / 458929.439396)||/||(18816.7809817 / 458452.025436)|
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)|
|=||((21734.9853947 + 97093.538343) / 229439.058839)||/||((17070.753179 + 83200.8477339) / 207643.951744)|
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|
|=||(11119.3632137 - 503.079194099||-||26953.1114282)||/||229439.058839|
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 -2.76 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