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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.
Cimarex Energy Co has a M-score of -2.91 suggests that the company is not a manipulator.
During the past 12 years, the highest Beneish M-Score of Cimarex Energy Co was -0.12. The lowest was -6.02. And the median was -2.91.
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 * 0.8998||+||0.528 * 1.0065||+||0.404 * 0.8143||+||0.892 * 1.3088||+||0.115 * 0.9942|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8077||+||4.679 * -0.1087||-||0.327 * 1.1907|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $449 Mil.|
Revenue was 636.669 + 599.216 + 516.602 + 561.336 = $2,314 Mil.
Gross Profit was 494.065 + 471.043 + 410.193 + 452.362 = $1,828 Mil.
Total Current Assets was $686 Mil.
Total Assets was $8,399 Mil.
Property, Plant and Equipment(Net PPE) was $7,032 Mil.
Depreciation, Depletion and Amortization(DDA) was $701 Mil.
Selling, General & Admin. Expense(SGA) was $91 Mil.
Total Current Liabilities was $801 Mil.
Long-Term Debt was $1,500 Mil.
Net Income was 148.64 + 138.457 + 206.827 + 138.37 = $632 Mil.
Non Operating Income was 4.129 + 6.955 + 7.881 + 2.263 = $21 Mil.
Cash Flow from Operations was 421.745 + 348.024 + 383.6 + 370.962 = $1,524 Mil.
|Accounts Receivable was $382 Mil.
Revenue was 493.757 + 426.356 + 440.868 + 406.912 = $1,768 Mil.
Gross Profit was 397.118 + 332.18 + 352.051 + 324.236 = $1,406 Mil.
Total Current Assets was $487 Mil.
Total Assets was $6,796 Mil.
Property, Plant and Equipment(Net PPE) was $5,634 Mil.
Depreciation, Depletion and Amortization(DDA) was $558 Mil.
Selling, General & Admin. Expense(SGA) was $86 Mil.
Total Current Liabilities was $672 Mil.
Long-Term Debt was $892 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)|
|=||(449.456 / 2313.823)||/||(381.634 / 1767.893)|
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)|
|=||(471.043 / 1767.893)||/||(494.065 / 2313.823)|
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 - (686.352 + 7032.124) / 8399.007)||/||(1 - (486.541 + 5633.609) / 6796.37)|
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))|
|=||(558.086 / (558.086 + 5633.609))||/||(701.125 / (701.125 + 7032.124))|
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)|
|=||(90.775 / 2313.823)||/||(85.873 / 1767.893)|
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 + 801.19) / 8399.007)||/||((892 + 671.816) / 6796.37)|
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|
|=||(632.294 - 21.228||-||1524.331)||/||8399.007|
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 -2.91 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
Cimarex Energy Co Annual Data
Cimarex Energy Co Quarterly Data