Switch to:
GuruFocus has detected 3 Warning Signs with Cimarex Energy Co $XEC.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Cimarex Energy Co (NYSE:XEC)
Beneish M-Score
-3.27 (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.

Cimarex Energy Co has a M-score of -3.27 suggests that the company is not a manipulator.

XEC' s Beneish M-Score Range Over the Past 10 Years
Min: -5.62   Max: 3.52
Current: -3.27

-5.62
3.52

During the past 13 years, the highest Beneish M-Score of Cimarex Energy Co was 3.52. The lowest was -5.62. And the median was -3.12.


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 Cimarex Energy Co 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 * 1.4076+0.528 * 1.0056+0.404 * 1.1092+0.892 * 0.8656+0.115 * 1.3754
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2065+4.679 * -0.2224-0.327 * 1.1877
=-3.27

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $275 Mil.
Revenue was 382.155 + 335.717 + 298.873 + 240.6 = $1,257 Mil.
Gross Profit was 271.596 + 226.13 + 189.732 + 115.375 = $803 Mil.
Total Current Assets was $969 Mil.
Total Assets was $4,682 Mil.
Property, Plant and Equipment(Net PPE) was $3,060 Mil.
Depreciation, Depletion and Amortization(DDA) was $466 Mil.
Selling, General & Admin. Expense(SGA) was $98 Mil.
Total Current Liabilities was $522 Mil.
Long-Term Debt was $1,488 Mil.
Net Income was 38.19 + -12.818 + -270.29 + -186.131 = $-431 Mil.
Non Operating Income was 3.218 + 3.828 + 2.011 + 1.65 = $11 Mil.
Cash Flow from Operations was 169.894 + 215.627 + 128.644 + 85.06 = $599 Mil.
Accounts Receivable was $225 Mil.
Revenue was 311.279 + 356.055 + 424.283 + 361.002 = $1,453 Mil.
Gross Profit was 171.794 + 232.002 + 298.664 + 230.285 = $933 Mil.
Total Current Assets was $1,078 Mil.
Total Assets was $5,243 Mil.
Property, Plant and Equipment(Net PPE) was $3,506 Mil.
Depreciation, Depletion and Amortization(DDA) was $779 Mil.
Selling, General & Admin. Expense(SGA) was $94 Mil.
Total Current Liabilities was $410 Mil.
Long-Term Debt was $1,486 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)
=(274.57 / 1257.345) / (225.36 / 1452.619)
=0.21837284 / 0.15514047
=1.4076

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)
=(932.745 / 1452.619) / (802.833 / 1257.345)
=0.64211263 / 0.63851449
=1.0056

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 - (969.304 + 3059.536) / 4681.693) / (1 - (1077.93 + 3506.155) / 5243.286)
=0.13944806 / 0.12572288
=1.1092

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
=1257.345 / 1452.619
=0.8656

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))
=(778.923 / (778.923 + 3506.155)) / (465.936 / (465.936 + 3059.536))
=0.18177569 / 0.13216273
=1.3754

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)
=(98.424 / 1257.345) / (94.247 / 1452.619)
=0.07827923 / 0.06488074
=1.2065

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)
=((1487.939 + 522.352) / 4681.693) / ((1485.62 + 410.067) / 5243.286)
=0.42939402 / 0.3615456
=1.1877

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
=(-431.049 - 10.707 - 599.225) / 4681.693
=-0.2224

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.

Cimarex Energy Co has a M-score of -3.27 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 local exchange's currency.

Cimarex Energy Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.9110.59681.71640.85391.0610.91250.98650.92260.91361.4076
GMI 1.00320.9671.10090.92171.0261.02780.9941.04321.18941.0056
AQI 0.91.26311.21460.78280.74190.8790.86130.82111.65411.1092
SGI 1.12941.37670.51251.5981.08940.92381.23041.21330.59920.8656
DEPI 0.95340.64811.52811.14621.06740.92970.990.89950.55981.3754
SGAI 1.16820.59481.82210.74850.96661.28720.97670.86391.63561.2065
LVGI 1.02861.49310.89390.8720.96351.16131.00091.17091.39351.1877
TATA -0.1248-0.5482-0.2818-0.1297-0.1441-0.1336-0.1077-0.131-0.5939-0.2224
M-score -3.11-5.12-3.48-2.72-3.08-3.40-2.85-3.07-5.62-3.27

Cimarex Energy Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.87530.92261.62160.95663.70030.91360.80941.14080.26861.4076
GMI 1.02341.04321.0821.10161.13911.18941.20021.22071.1551.0056
AQI 0.8220.82110.9821.10321.35541.65411.55141.61791.35191.1092
SGI 1.24971.21331.00690.8530.69930.59920.60940.61150.70630.8656
DEPI 0.89950.89950.81110.67590.62780.55980.65930.79931.05231.3754
SGAI 0.86680.86390.95031.18491.44211.63561.63661.82631.57011.2065
LVGI 1.17681.17091.13460.96391.16711.39351.43971.57921.35911.1877
TATA -0.1212-0.131-0.1853-0.2696-0.4171-0.5939-0.5825-0.5284-0.3647-0.2224
M-score -3.05-3.07-2.79-3.87-2.17-5.62-5.69-5.16-5.11-3.27
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK