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Cimarex Energy Co (NYSE:XEC)
Beneish M-Score
-2.17 (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 -2.17 signals that the company is a manipulator.

XEC' s Beneish M-Score Range Over the Past 10 Years
Min: -6.72   Max: 3.59
Current: -2.17

-6.72
3.59

During the past 13 years, the highest Beneish M-Score of Cimarex Energy Co was 3.59. The lowest was -6.72. And the median was -2.98.


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 * 3.7003+0.528 * 1.1391+0.404 * 1.3554+0.892 * 0.6993+0.115 * 0.6278
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4421+4.679 * -0.4171-0.327 * 1.1671
=-2.17

* 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 $246 Mil.
Revenue was 356.055 + 424.283 + 361.002 + 538.551 = $1,680 Mil.
Gross Profit was 232.002 + 298.664 + 230.285 + 388.742 = $1,150 Mil.
Total Current Assets was $1,238 Mil.
Total Assets was $6,336 Mil.
Property, Plant and Equipment(Net PPE) was $4,423 Mil.
Depreciation, Depletion and Amortization(DDA) was $838 Mil.
Selling, General & Admin. Expense(SGA) was $93 Mil.
Total Current Liabilities was $481 Mil.
Long-Term Debt was $1,500 Mil.
Net Income was -763.284 + -600.215 + -414.941 + 75.792 = $-1,703 Mil.
Non Operating Income was 2.375 + 3.854 + 3.585 + 6.7 = $17 Mil.
Cash Flow from Operations was 206.001 + 257.372 + 113.173 + 347.395 = $924 Mil.
Accounts Receivable was $95 Mil.
Revenue was 649.74 + 636.669 + 599.216 + 516.602 = $2,402 Mil.
Gross Profit was 497.495 + 494.065 + 471.043 + 410.193 = $1,873 Mil.
Total Current Assets was $1,111 Mil.
Total Assets was $8,644 Mil.
Property, Plant and Equipment(Net PPE) was $6,854 Mil.
Depreciation, Depletion and Amortization(DDA) was $761 Mil.
Selling, General & Admin. Expense(SGA) was $92 Mil.
Total Current Liabilities was $816 Mil.
Long-Term Debt was $1,500 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)
=(246.456 / 1679.891) / (95.243 / 2402.227)
=0.14670952 / 0.03964779
=3.7003

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)
=(298.664 / 2402.227) / (232.002 / 1679.891)
=0.77960826 / 0.68438548
=1.1391

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 - (1238.461 + 4422.838) / 6336.362) / (1 - (1110.537 + 6854.11) / 8644.094)
=0.10653795 / 0.07860245
=1.3554

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
=1679.891 / 2402.227
=0.6993

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))
=(761.302 / (761.302 + 6854.11)) / (837.625 / (837.625 + 4422.838))
=0.09996859 / 0.15923028
=0.6278

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)
=(93.048 / 1679.891) / (92.268 / 2402.227)
=0.05538931 / 0.03840936
=1.4421

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)
=((1500 + 481.108) / 6336.362) / ((1500 + 815.643) / 8644.094)
=0.31265701 / 0.2678873
=1.1671

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
=(-1702.648 - 16.514 - 923.941) / 6336.362
=-0.4171

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 -2.17 signals that the company is likely to 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.

Cimarex Energy Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 5.4680.93550.9110.59681.71640.85391.0610.91250.98650.9236
GMI 1.04021.05191.00320.9671.10090.92171.0261.02780.9941.0432
AQI 3.12160.80940.91.26311.21460.78210.74270.8790.86130.8403
SGI 2.35421.13281.12941.37670.51251.5981.08940.92381.23041.2133
DEPI 1.66630.83820.95340.64811.52811.14621.06740.92970.990.8995
SGAI 0.66841.161.16820.59481.82210.74850.96661.28720.97670.8639
LVGI 1.38670.92141.02861.49310.89390.8720.96351.16131.00091.1774
TATA -0.0744-0.1191-0.1228-0.5482-0.2818-0.1297-0.1441-0.1336-0.1077-0.1308
M-score 3.38-3.05-3.10-5.12-3.48-2.72-3.08-3.40-2.85-3.06

Cimarex Energy Co Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.40770.21820.98670.17190.19060.87530.92361.62160.95663.7003
GMI 1.00050.99250.99380.98721.00651.02341.04321.0821.10161.1391
AQI 0.81340.81530.86130.85540.81430.8220.84030.9821.10321.3554
SGI 1.07761.19131.23021.33391.30881.24971.21331.00690.8530.6993
DEPI 0.95350.96050.990.96480.99420.89950.89950.81110.67590.6278
SGAI 1.21670.95910.97690.94630.80770.86680.86390.95031.18491.4421
LVGI 1.02020.96991.00090.9981.19071.17681.17741.13460.96391.1671
TATA -0.1182-0.1212-0.1077-0.11-0.1087-0.1212-0.1308-0.1853-0.2696-0.4171
M-score -2.71-3.66-2.85-3.52-3.56-3.05-3.06-2.79-3.87-2.17
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