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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.
During the past 13 years, the highest Beneish M-Score of United States Steel Corp was -0.60. The lowest was -5.33. And the median was -2.75.
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 States Steel Corp 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 * 0.8948||+||0.528 * 0.6894||+||0.404 * 1.2223||+||0.892 * 1.0048||+||0.115 * 0.8589|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8533||+||4.679 * -0.1112||-||0.327 * 1.0406|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $1,942 Mil.|
Revenue was 4072 + 4587 + 4400 + 4448 = $17,507 Mil.
Gross Profit was 600 + 739 + 303 + 410 = $2,052 Mil.
Total Current Assets was $6,431 Mil.
Total Assets was $12,314 Mil.
Property, Plant and Equipment(Net PPE) was $4,574 Mil.
Depreciation, Depletion and Amortization(DDA) was $627 Mil.
Selling, General & Admin. Expense(SGA) was $523 Mil.
Total Current Liabilities was $3,569 Mil.
Long-Term Debt was $3,120 Mil.
Net Income was 275 + -207 + -18 + 52 = $102 Mil.
Non Operating Income was -2 + -5 + -5 + -9 = $-21 Mil.
Cash Flow from Operations was 245 + -106 + 783 + 570 = $1,492 Mil.
|Accounts Receivable was $2,160 Mil.
Revenue was 4269 + 4131 + 4429 + 4595 = $17,424 Mil.
Gross Profit was 358 + 382 + 315 + 353 = $1,408 Mil.
Total Current Assets was $6,078 Mil.
Total Assets was $13,143 Mil.
Property, Plant and Equipment(Net PPE) was $5,922 Mil.
Depreciation, Depletion and Amortization(DDA) was $684 Mil.
Selling, General & Admin. Expense(SGA) was $610 Mil.
Total Current Liabilities was $3,245 Mil.
Long-Term Debt was $3,616 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1942 / 17507)||/||(2160 / 17424)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(739 / 17424)||/||(600 / 17507)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (6431 + 4574) / 12314)||/||(1 - (6078 + 5922) / 13143)|
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.
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))|
|=||(684 / (684 + 5922))||/||(627 / (627 + 4574))|
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)|
|=||(523 / 17507)||/||(610 / 17424)|
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)|
|=||((3120 + 3569) / 12314)||/||((3616 + 3245) / 13143)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(102 - -21||-||1492)||/||12314|
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 States Steel Corp has a M-score of -3.17 suggests that the company will not be a manipulator.
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
United States Steel Corp Annual Data
United States Steel Corp Quarterly Data