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United Continental Holdings Inc (NYSE:UAL)
Beneish M-Score
-2.28 (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 -2.27 suggests that the company is not a manipulator.

UAL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.91   Max: -1.32
Current: -2.28

-3.91
-1.32

During the past 13 years, the highest Beneish M-Score of United Continental Holdings Inc was -1.32. The lowest was -3.91. 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 * 0.9902+0.528 * 0.8775+0.404 * 0.9773+0.892 * 0.9801+0.115 * 1.0475
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9958+4.679 * 0.0604-0.327 * 0.9326
=-2.27

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,513 Mil.
Revenue was 10306 + 9914 + 8608 + 9313 = $38,141 Mil.
Gross Profit was 6825 + 6241 + 2933 + 5203 = $21,202 Mil.
Total Current Assets was $10,097 Mil.
Total Assets was $41,869 Mil.
Property, Plant and Equipment(Net PPE) was $21,176 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,774 Mil.
Selling, General & Admin. Expense(SGA) was $9,394 Mil.
Total Current Liabilities was $13,488 Mil.
Long-Term Debt was $10,672 Mil.
Net Income was 4816 + 1193 + 508 + 28 = $6,545 Mil.
Non Operating Income was -147 + -100 + -74 + -443 = $-764 Mil.
Cash Flow from Operations was 1300 + 1752 + 1825 + -98 = $4,779 Mil.
Accounts Receivable was $1,559 Mil.
Revenue was 10563 + 10329 + 8696 + 9329 = $38,917 Mil.
Gross Profit was 5837 + 5599 + 2037 + 5511 = $18,984 Mil.
Total Current Assets was $9,225 Mil.
Total Assets was $38,011 Mil.
Property, Plant and Equipment(Net PPE) was $18,943 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,669 Mil.
Selling, General & Admin. Expense(SGA) was $9,626 Mil.
Total Current Liabilities was $12,864 Mil.
Long-Term Debt was $10,655 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)
=(1513 / 38141) / (1559 / 38917)
=0.0396686 / 0.04005961
=0.9902

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)
=(6241 / 38917) / (6825 / 38141)
=0.48780738 / 0.55588474
=0.8775

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 - (10097 + 21176) / 41869) / (1 - (9225 + 18943) / 38011)
=0.25307507 / 0.25895136
=0.9773

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
=38141 / 38917
=0.9801

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))
=(1669 / (1669 + 18943)) / (1774 / (1774 + 21176))
=0.08097225 / 0.07729847
=1.0475

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)
=(9394 / 38141) / (9626 / 38917)
=0.24629664 / 0.24734692
=0.9958

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)
=((10672 + 13488) / 41869) / ((10655 + 12864) / 38011)
=0.5770379 / 0.61874194
=0.9326

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
=(6545 - -764 - 4779) / 41869
=0.0604

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 -2.27 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 0.87831.03980.8021.28651.52030.52920.98421.09020.7503
GMI 0.39331.42971.75810.57011.31951.0730.98970.93840.9565
AQI 3.13730.92850.78840.90861.33871.03880.98241.07010.9567
SGI 1.11281.04151.00250.80891.42791.5911.00111.03031.0162
DEPI 0.86110.95480.90850.97231.4240.69521.06440.91151.0805
SGAI 0.80691.79580.62751.12990.90250.96581.13111.03291.0056
LVGI 1.92480.96941.15081.02070.84370.9471.06410.97890.9927
TATA 0.839-0.0732-0.1853-0.0885-0.0429-0.0392-0.0444-0.0238-0.0246
M-score 1.69-2.68-3.21-3.10-1.40-2.53-2.75-2.49-2.84

United Continental Holdings Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.90261.09020.93370.93020.89090.75030.90110.88770.9902
GMI 1.05331.04291.11521.03361.00461.07980.91930.89850.8775
AQI 0.9961.07010.91930.94680.95480.95670.98060.9670.9773
SGI 1.00731.03031.02641.03351.03361.01621.01460.99520.9801
DEPI 0.97830.91150.99771.01671.05131.08051.03861.06351.0475
SGAI 0.94760.91230.75610.86240.89990.79470.98241.00250.9958
LVGI 1.02220.97890.99440.99590.97730.99270.97180.97350.9326
TATA -0.0544-0.0238-0.0338-0.0372-0.028-0.0246-0.0242-0.01720.0604
M-score -2.79-2.42-2.60-2.67-2.67-2.74-2.70-2.72-2.27
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