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United Continental Holdings Inc (NYSE:UAL)
Beneish M-Score
-2.49 (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 -2.49 suggests that the company is not a manipulator.

UAL' s Beneish M-Score Range Over the Past 10 Years
Min: -4.08   Max: -1.28
Current: -2.49

-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 -2.78.


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 * 1.0248+0.528 * 0.8749+0.404 * 1.0091+0.892 * 0.9618+0.115 * 0.9772
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0925+4.679 * 0.0141-0.327 * 0.96
=-2.49

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,450 Mil.
Revenue was 9396 + 8195 + 9036 + 10306 = $36,933 Mil.
Gross Profit was 6244 + 5350 + 5898 + 6825 = $24,317 Mil.
Total Current Assets was $7,844 Mil.
Total Assets was $40,476 Mil.
Property, Plant and Equipment(Net PPE) was $22,388 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,915 Mil.
Selling, General & Admin. Expense(SGA) was $11,723 Mil.
Total Current Liabilities was $13,982 Mil.
Long-Term Debt was $10,015 Mil.
Net Income was 588 + 313 + 823 + 4816 = $6,540 Mil.
Non Operating Income was 5 + -18 + -31 + -147 = $-191 Mil.
Cash Flow from Operations was 2547 + 1199 + 1115 + 1300 = $6,161 Mil.
Accounts Receivable was $1,471 Mil.
Revenue was 9914 + 8608 + 9313 + 10563 = $38,398 Mil.
Gross Profit was 6047 + 5033 + 5203 + 5837 = $22,120 Mil.
Total Current Assets was $8,793 Mil.
Total Assets was $39,367 Mil.
Property, Plant and Equipment(Net PPE) was $20,701 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,727 Mil.
Selling, General & Admin. Expense(SGA) was $11,156 Mil.
Total Current Liabilities was $13,810 Mil.
Long-Term Debt was $10,501 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)
=(1450 / 36933) / (1471 / 38398)
=0.03926028 / 0.03830929
=1.0248

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)
=(22120 / 38398) / (24317 / 36933)
=0.57607167 / 0.65840847
=0.8749

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 - (7844 + 22388) / 40476) / (1 - (8793 + 20701) / 39367)
=0.25308825 / 0.25079381
=1.0091

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
=36933 / 38398
=0.9618

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))
=(1727 / (1727 + 20701)) / (1915 / (1915 + 22388))
=0.07700196 / 0.07879686
=0.9772

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)
=(11723 / 36933) / (11156 / 38398)
=0.31741261 / 0.29053597
=1.0925

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)
=((10015 + 13982) / 40476) / ((10501 + 13810) / 39367)
=0.59286985 / 0.61754769
=0.96

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
=(6540 - -191 - 6161) / 40476
=0.0141

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 -2.49 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.

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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.93370.93020.89090.75030.90110.88770.99021.01131.11391.0248
GMI 1.11521.03361.00461.07980.83020.82110.80520.76370.8670.8749
AQI 0.91930.94680.95480.8950.98060.9670.97731.07061.04531.0091
SGI 1.02641.03351.03361.01621.01460.99520.98010.97330.96490.9618
DEPI 0.99771.01671.05131.11781.03861.06351.04751.02141.03550.9772
SGAI 0.75610.86240.89990.79471.21141.20911.19781.29751.08161.0925
LVGI 0.99440.99590.97731.0060.97180.97350.93260.88710.93390.96
TATA -0.0338-0.0372-0.028-0.0251-0.0242-0.01720.06040.04160.05140.0141
M-score -2.60-2.67-2.67-2.77-2.79-2.80-2.34-2.41-2.21-2.49
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