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GuruFocus has detected 6 Warning Signs with Sempra Energy $SRE.
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Sempra Energy (NYSE:SRE)
Beneish M-Score
0.00 (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.

Sempra Energy has a M-score of signals that the company is a manipulator.

During the past 13 years, the highest Beneish M-Score of Sempra Energy was 1.11. The lowest was -2.93. And the median was -2.23.


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 Sempra Energy 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,390 Mil.
Revenue was 2870 + 2535 + 2156 + 2622 = $10,183 Mil.
Gross Profit was 1904 + 1596 + 1124 + 1705 = $6,329 Mil.
Total Current Assets was $3,110 Mil.
Total Assets was $47,786 Mil.
Property, Plant and Equipment(Net PPE) was $32,931 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,312 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $5,927 Mil.
Long-Term Debt was $14,429 Mil.
Net Income was 379 + 622 + 16 + 319 = $1,336 Mil.
Non Operating Income was 40 + 654 + 37 + 27 = $758 Mil.
Cash Flow from Operations was 628 + 809 + 290 + 592 = $2,319 Mil.
Accounts Receivable was $1,283 Mil.
Revenue was 2701 + 2481 + 2367 + 2682 = $10,231 Mil.
Gross Profit was 1752 + 1489 + 1515 + 1722 = $6,478 Mil.
Total Current Assets was $2,891 Mil.
Total Assets was $41,150 Mil.
Property, Plant and Equipment(Net PPE) was $28,039 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,250 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $4,612 Mil.
Long-Term Debt was $13,134 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)
=(1390 / 10183) / (1283 / 10231)
=0.13650201 / 0.12540319
=

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)
=(6478 / 10231) / (6329 / 10183)
=0.63317369 / 0.62152607
=

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 - (3110 + 32931) / 47786) / (1 - (2891 + 28039) / 41150)
=0.24578328 / 0.24835966
=

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
=10183 / 10231
=

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))
=(1250 / (1250 + 28039)) / (1312 / (1312 + 32931))
=0.04267814 / 0.0383144
=

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)
=(0 / 10183) / (0 / 10231)
=0 / 0
=

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)
=((14429 + 5927) / 47786) / ((13134 + 4612) / 41150)
=0.42598251 / 0.43125152
=

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
=(1336 - 758 - 2319) / 47786
=-0.0364

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.

Sempra Energy has a M-score of signals that the company is likely to 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 local exchange's currency.

Sempra Energy Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.92670.261
GMI 0.9571.1233
AQI 1.03791.9846
SGI 0.97250.9405
DEPI 1.07811.1257
SGAI 1.34040
LVGI 0.91990.8139
TATA -0.0409-0.0191
M-score -2.79-2.59

Sempra Energy Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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