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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.
United States Steel Corporation has a M-score of -3.41 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of United States Steel Corporation was -0.60. The lowest was -5.91. And the median was -2.66.
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 Corporation 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 * 1.1464||+||0.528 * 1.0916||+||0.404 * 0.3994||+||0.892 * 0.9015||+||0.115 * 0.9031|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0237||+||4.679 * -0.1535||-||0.327 * 1.1469|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|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.
Net Income was 270 + -1791 + -78 + -73 = $-1,672 Mil.
Non Operating Income was -14 + -24 + -11 + -20 = $-69 Mil.
Cash Flow from Operations was -7 + 37 + 151 + 233 = $414 Mil.
|Accounts Receivable was $2,090 Mil.
Revenue was 4487 + 4652 + 5017 + 5172 = $19,328 Mil.
Gross Profit was 293 + 334 + 532 + 546 = $1,705 Mil.
Total Current Assets was $5,496 Mil.
Total Assets was $15,217 Mil.
Property, Plant and Equipment(Net PPE) was $6,408 Mil.
Depreciation, Depletion and Amortization(DDA) was $661 Mil.
Selling, General & Admin. Expense(SGA) was $661 Mil.
Total Current Liabilities was $2,990 Mil.
Long-Term Debt was $3,936 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)|
|=||(2160 / 17424)||/||(2090 / 19328)|
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)|
|=||(382 / 19328)||/||(358 / 17424)|
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 - (6078 + 5922) / 13143)||/||(1 - (5496 + 6408) / 15217)|
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))|
|=||(661 / (661 + 6408))||/||(684 / (684 + 5922))|
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)|
|=||(610 / 17424)||/||(661 / 19328)|
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)|
|=||((3616 + 3245) / 13143)||/||((3936 + 2990) / 15217)|
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|
|=||(-1672 - -69||-||414)||/||13143|
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 Corporation has a M-score of -3.41 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 Corporation Annual Data
United States Steel Corporation Quarterly Data