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United Continental Holdings Inc (NYSE:UAL)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

UAL' s 10-Year Beneish M-Score Range
Min: -5.15   Max: -1.35
Current: -2.73

-5.15
-1.35

During the past 13 years, the highest Beneish M-Score of United Continental Holdings Inc was -1.35. The lowest was -5.15. 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 * 0.8877+0.528 * 0.8842+0.404 * 0.967+0.892 * 0.9952+0.115 * 1.0635
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0467+4.679 * -0.0172-0.327 * 0.9735
=-2.73

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,471 Mil.
Revenue was 9914 + 8608 + 9313 + 10563 = $38,398 Mil.
Gross Profit was 6241 + 3330 + 5871 + 5615 = $21,057 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 $11,481 Mil.
Total Current Liabilities was $13,810 Mil.
Long-Term Debt was $10,501 Mil.
Net Income was 1193 + 508 + 28 + 924 = $2,653 Mil.
Non Operating Income was -100 + -74 + -443 + -106 = $-723 Mil.
Cash Flow from Operations was 1752 + 1825 + -98 + 574 = $4,053 Mil.
Accounts Receivable was $1,665 Mil.
Revenue was 10329 + 8696 + 9329 + 10228 = $38,582 Mil.
Gross Profit was 5599 + 2495 + 5511 + 5102 = $18,707 Mil.
Total Current Assets was $9,619 Mil.
Total Assets was $38,447 Mil.
Property, Plant and Equipment(Net PPE) was $18,857 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,682 Mil.
Selling, General & Admin. Expense(SGA) was $11,021 Mil.
Total Current Liabilities was $13,334 Mil.
Long-Term Debt was $11,054 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)
=(1471 / 38398) / (1665 / 38582)
=0.03830929 / 0.04315484
=0.8877

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)
=(3330 / 38582) / (6241 / 38398)
=0.48486341 / 0.54838794
=0.8842

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 - (8793 + 20701) / 39367) / (1 - (9619 + 18857) / 38447)
=0.25079381 / 0.25934403
=0.967

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
=38398 / 38582
=0.9952

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))
=(1682 / (1682 + 18857)) / (1727 / (1727 + 20701))
=0.08189298 / 0.07700196
=1.0635

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)
=(11481 / 38398) / (11021 / 38582)
=0.29899995 / 0.28565134
=1.0467

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)
=((10501 + 13810) / 39367) / ((11054 + 13334) / 38447)
=0.61754769 / 0.63432778
=0.9735

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
=(2653 - -723 - 4053) / 39367
=-0.0172

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 -2.73 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.03980.8021.28651.52030.52920.98421.09020.7503
GMI 1.42971.51040.75691.15671.0730.98970.93840.9565
AQI 0.92850.78840.90861.33871.03880.98241.07010.9567
SGI 1.04151.00250.80891.42791.5911.00111.03031.0162
DEPI 0.95480.90850.97231.4240.69521.06440.91151.0805
SGAI 1.79580.78641.16830.90940.97881.01511.03581.016
LVGI 0.96941.15081.02070.84370.9471.06410.97890.9927
TATA -0.0732-0.1853-0.0885-0.0429-0.0392-0.0444-0.0238-0.0246
M-score -2.68-3.37-3.01-1.49-2.53-2.73-2.49-2.84

United Continental Holdings Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.88560.96050.90261.09020.93370.93020.89090.75030.90110.8877
GMI 0.95731.11341.09911.08651.11151.00830.99231.030.90410.8842
AQI 1.06621.01820.9961.07010.91930.94680.95480.95670.98060.967
SGI 0.99360.99181.00731.03031.02641.03351.03361.01621.01460.9952
DEPI 1.01891.01610.97830.91150.99771.01671.05131.08051.03861.0635
SGAI 1.08990.9910.99120.98410.81540.84650.84370.85351.01181.0467
LVGI 1.03931.01461.02220.97890.99440.99590.97730.99270.97180.9735
TATA -0.0517-0.0501-0.0544-0.0238-0.0338-0.0372-0.028-0.0246-0.0242-0.0172
M-score -2.85-2.69-2.78-2.41-2.62-2.68-2.66-2.78-2.72-2.73
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