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United Continental Holdings Inc (NYSE:UAL)
Beneish M-Score
-2.21 (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.

United Continental Holdings Inc has a M-score of -2.21 signals that the company is a manipulator.

UAL' s Beneish M-Score Range Over the Past 10 Years
Min: -4.08   Max: -1.28
Current: -2.21

-4.08
-1.28

During the past 13 years, the highest Beneish M-Score of United Continental Holdings Inc was -1.28. The lowest was -4.08. And the median was -2.79.


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 United Continental Holdings 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 * 1.1139+0.528 * 0.8601+0.404 * 1.0453+0.892 * 0.9649+0.115 * 1.0355
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0997+4.679 * 0.0514-0.327 * 0.9339
=-2.21

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,581 Mil.
Revenue was 8195 + 9036 + 10306 + 9914 = $37,451 Mil.
Gross Profit was 5350 + 5898 + 6825 + 6241 = $24,314 Mil.
Total Current Assets was $7,224 Mil.
Total Assets was $40,373 Mil.
Property, Plant and Equipment(Net PPE) was $22,006 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,869 Mil.
Selling, General & Admin. Expense(SGA) was $11,788 Mil.
Total Current Liabilities was $13,380 Mil.
Long-Term Debt was $10,197 Mil.
Net Income was 313 + 823 + 4816 + 1193 = $7,145 Mil.
Non Operating Income was -18 + -31 + -147 + -100 = $-296 Mil.
Cash Flow from Operations was 1199 + 1115 + 1300 + 1752 = $5,366 Mil.
Accounts Receivable was $1,471 Mil.
Revenue was 8608 + 9313 + 10563 + 10329 = $38,813 Mil.
Gross Profit was 5033 + 5203 + 5837 + 5599 = $21,672 Mil.
Total Current Assets was $9,509 Mil.
Total Assets was $39,091 Mil.
Property, Plant and Equipment(Net PPE) was $19,260 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,699 Mil.
Selling, General & Admin. Expense(SGA) was $11,109 Mil.
Total Current Liabilities was $13,969 Mil.
Long-Term Debt was $10,474 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)
=(1581 / 37451) / (1471 / 38813)
=0.04221516 / 0.03789967
=1.1139

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)
=(5898 / 38813) / (5350 / 37451)
=0.55836962 / 0.64922165
=0.8601

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 - (7224 + 22006) / 40373) / (1 - (9509 + 19260) / 39091)
=0.27600129 / 0.26405055
=1.0453

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
=37451 / 38813
=0.9649

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))
=(1699 / (1699 + 19260)) / (1869 / (1869 + 22006))
=0.08106303 / 0.07828272
=1.0355

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)
=(11788 / 37451) / (11109 / 38813)
=0.31475795 / 0.28621854
=1.0997

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)
=((10197 + 13380) / 40373) / ((10474 + 13969) / 39091)
=0.58397939 / 0.62528459
=0.9339

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
=(7145 - -296 - 5366) / 40373
=0.0514

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.

United Continental Holdings Inc has a M-score of -2.21 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 own currency.

United Continental Holdings Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.87831.03980.8021.28651.52030.52920.98421.09020.75031.0113
GMI 0.39331.42971.75810.57011.31951.0151.04630.93840.95650.8378
AQI 3.13730.92850.78840.90861.33871.03880.98241.07010.8951.0706
SGI 1.11281.04151.00250.80891.42791.5911.00111.03031.01620.9733
DEPI 0.86110.95480.90850.97231.4240.69521.06440.91151.11781.0214
SGAI 0.80691.79580.62751.12990.90251.0731.01811.03291.00561.0841
LVGI 1.92480.96941.15081.02070.84370.9471.06410.97891.0060.8871
TATA -0.065-0.0732-0.1853-0.0885-0.0429-0.0392-0.0444-0.0238-0.02510.0416
M-score -2.54-2.68-3.21-3.10-1.40-2.58-2.70-2.49-2.87-2.33

United Continental Holdings Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.09020.93370.93020.89090.75030.90110.88770.99021.01131.1139
GMI 1.04291.11521.03361.00461.07980.83020.81390.79840.75750.8601
AQI 1.07010.91930.94680.95480.8950.98060.9670.97731.07061.0453
SGI 1.03031.02641.03351.03361.01621.01460.99520.98010.97330.9649
DEPI 0.91150.99771.01671.05131.11781.03861.06351.04751.02141.0355
SGAI 0.91230.75610.86240.89990.79471.21141.23011.21841.31951.0997
LVGI 0.97890.99440.99590.97731.0060.97180.97350.93260.88710.9339
TATA -0.0238-0.0338-0.0372-0.028-0.0251-0.0242-0.01720.06040.04160.0514
M-score -2.42-2.60-2.67-2.67-2.77-2.79-2.80-2.35-2.41-2.21
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