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Cimarex Energy Co (NYSE:XEC)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

XEC' s 10-Year Beneish M-Score Range
Min: -5.12   Max: 3.59
Current: -3.06

-5.12
3.59

During the past 13 years, the highest Beneish M-Score of Cimarex Energy Co was 3.59. The lowest was -5.12. And the median was -3.08.


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 * 0.9236+0.528 * 1.0432+0.404 * 0.8403+0.892 * 1.2133+0.115 * 0.8995
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8639+4.679 * -0.1308-0.327 * 1.1774
=-3.06

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $412 Mil.
Revenue was 538.551 + 649.74 + 636.669 + 599.216 = $2,424 Mil.
Gross Profit was 388.742 + 497.495 + 494.065 + 471.043 = $1,851 Mil.
Total Current Assets was $932 Mil.
Total Assets was $8,725 Mil.
Property, Plant and Equipment(Net PPE) was $7,115 Mil.
Depreciation, Depletion and Amortization(DDA) was $806 Mil.
Selling, General & Admin. Expense(SGA) was $96 Mil.
Total Current Liabilities was $776 Mil.
Long-Term Debt was $1,500 Mil.
Net Income was 75.792 + 144.315 + 148.64 + 138.457 = $507 Mil.
Non Operating Income was 6.7 + 11.123 + 4.129 + 6.955 = $29 Mil.
Cash Flow from Operations was 347.395 + 502.201 + 421.745 + 348.024 = $1,619 Mil.
Accounts Receivable was $368 Mil.
Revenue was 516.602 + 561.336 + 493.757 + 426.356 = $1,998 Mil.
Gross Profit was 410.193 + 452.362 + 397.118 + 332.18 = $1,592 Mil.
Total Current Assets was $469 Mil.
Total Assets was $7,253 Mil.
Property, Plant and Equipment(Net PPE) was $6,113 Mil.
Depreciation, Depletion and Amortization(DDA) was $616 Mil.
Selling, General & Admin. Expense(SGA) was $92 Mil.
Total Current Liabilities was $683 Mil.
Long-Term Debt was $924 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)
=(412.108 / 2424.176) / (367.754 / 1998.051)
=0.16999921 / 0.18405636
=0.9236

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)
=(497.495 / 1998.051) / (388.742 / 2424.176)
=0.79670289 / 0.76370074
=1.0432

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 - (931.804 + 7114.742) / 8725.293) / (1 - (469.139 + 6112.555) / 7253.135)
=0.07779074 / 0.09257252
=0.8403

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
=2424.176 / 1998.051
=1.2133

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))
=(615.874 / (615.874 + 6112.555)) / (806.021 / (806.021 + 7114.742))
=0.09153311 / 0.10176052
=0.8995

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)
=(96.161 / 2424.176) / (91.745 / 1998.051)
=0.0396675 / 0.04591725
=0.8639

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 + 776.327) / 8725.293) / ((924 + 683.167) / 7253.135)
=0.26088832 / 0.22158239
=1.1774

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
=(507.204 - 28.907 - 1619.365) / 8725.293
=-0.1308

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 -3.06 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.

Cimarex Energy Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.93550.9110.59681.71640.85391.0610.91250.98650.9236
GMI 1.05191.00320.9671.10090.92171.0261.02780.9941.0432
AQI 0.80940.91.26311.21460.78210.74270.8790.86130.8403
SGI 1.13281.12941.37670.51251.5981.08940.92381.23041.2133
DEPI 0.83820.95340.64811.52811.14621.06740.92970.990.8995
SGAI 1.161.16820.59481.82210.74850.96661.28720.97670.8639
LVGI 0.92141.02861.49310.89390.8720.96351.16131.00091.1774
TATA -0.1191-0.1228-0.5482-0.2818-0.1297-0.1441-0.1336-0.1077-0.1308
M-score -3.05-3.10-5.12-3.48-2.72-3.08-3.40-2.85-3.06

Cimarex Energy Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.050.91230.99441.40770.21820.98670.17190.19060.87530.9236
GMI 1.03361.0281.02691.00050.99250.99380.98721.00651.02341.0432
AQI 0.82760.8790.80970.81340.81530.86130.85540.81430.8220.8403
SGI 0.92970.9240.92771.07761.19131.23021.33391.30881.24971.2133
DEPI 0.98740.92970.95910.95350.96050.990.96480.99420.89950.8995
SGAI 1.24281.2871.30631.21670.95910.97690.94630.80770.86680.8639
LVGI 1.29511.16131.14111.02020.96991.00090.9981.19071.17681.1774
TATA -0.1252-0.1336-0.1297-0.1182-0.1212-0.1077-0.11-0.1087-0.1212-0.1308
M-score -3.27-3.40-3.32-2.71-3.66-2.85-3.52-3.56-3.05-3.06
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