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GuruFocus has detected 6 Warning Signs with Coca-Cola European Partners PLC $CCE.
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Coca-Cola European Partners PLC (NYSE:CCE)
Beneish M-Score
-1.99 (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.

Coca-Cola European Partners PLC has a M-score of -1.99 signals that the company is a manipulator.

CCE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.72   Max: -0.05
Current: -1.99

-4.72
-0.05

During the past 13 years, the highest Beneish M-Score of Coca-Cola European Partners PLC was -0.05. The lowest was -4.72. And the median was -2.60.


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 Coca-Cola European Partners PLC 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 * 0.9144+0.528 * 0.9515+0.404 * 1.2975+0.892 * 1.6169+0.115 * 1.1521
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1661+4.679 * -0.0368-0.327 * 0.6663
=-1.99

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $1,960 Mil.
Revenue was 2547.59358289 + 2747.89029536 + 3351.29068462 + 2478.67865169 = $11,125 Mil.
Gross Profit was 977.540106952 + 1148.73417722 + 1303.03030303 + 905.421348315 = $4,335 Mil.
Total Current Assets was $3,675 Mil.
Total Assets was $19,828 Mil.
Property, Plant and Equipment(Net PPE) was $4,225 Mil.
Depreciation, Depletion and Amortization(DDA) was $493 Mil.
Selling, General & Admin. Expense(SGA) was $3,275 Mil.
Total Current Liabilities was $3,917 Mil.
Long-Term Debt was $5,932 Mil.
Net Income was 157.219251337 + 12.6582278481 + 367.003367003 + 170.647191011 = $708 Mil.
Non Operating Income was 0 + -13.7130801688 + -1.12233445567 + -2.51573033708 = $-17 Mil.
Cash Flow from Operations was 197.860962567 + 273.206751055 + 726.150392817 + 258.065168539 = $1,455 Mil.
Accounts Receivable was $1,326 Mil.
Revenue was 1487.72383073 + 1625.27233115 + 1838.38383838 + 1929.25476992 = $6,881 Mil.
Gross Profit was 549.192650334 + 594.77124183 + 701.459034792 + 705.459034792 = $2,551 Mil.
Total Current Assets was $2,250 Mil.
Total Assets was $7,851 Mil.
Property, Plant and Equipment(Net PPE) was $1,961 Mil.
Depreciation, Depletion and Amortization(DDA) was $268 Mil.
Selling, General & Admin. Expense(SGA) was $1,737 Mil.
Total Current Liabilities was $2,403 Mil.
Long-Term Debt was $3,450 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)
=(1960.42780749 / 11125.4532146) / (1325.90868597 / 6880.63477019)
=0.17621105 / 0.19270151
=0.9144

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)
=(2550.88196175 / 6880.63477019) / (4334.72593551 / 11125.4532146)
=0.37073352 / 0.38962241
=0.9515

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 - (3674.86631016 + 4224.59893048) / 19827.8074866) / (1 - (2249.72939866 + 1961.40311804) / 7851.49665924)
=0.60159663 / 0.46365226
=1.2975

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
=11125.4532146 / 6880.63477019
=1.6169

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))
=(268.276794026 / (268.276794026 + 1961.40311804)) / (492.673784292 / (492.673784292 + 4224.59893048))
=0.12032077 / 0.10444039
=1.1521

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)
=(3274.62773526 / 11125.4532146) / (1736.7655598 / 6880.63477019)
=0.29433657 / 0.25241357
=1.1661

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)
=((5931.55080214 + 3916.57754011) / 19827.8074866) / ((3450.10801782 + 2402.71937639) / 7851.49665924)
=0.49668267 / 0.74544098
=0.6663

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
=(707.5280372 - -17.3511449615 - 1455.28327498) / 19827.8074866
=-0.0368

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.

Coca-Cola European Partners PLC has a M-score of -1.99 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 local exchange's currency.

Coca-Cola European Partners PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.99420.94531.06821.77160.84081.10651.02841.05320.96361.0325
GMI 1.03611.03310.97741.02191.00931.01741.03220.97090.98060.943
AQI 1.00270.55341.53261.030.95251.0131.03860.98831.02361.228
SGI 1.06471.07080.65470.47621.2670.91211.02840.97530.88611.4417
DEPI 0.97240.84181.35441.08580.81.05361.10490.87041.0041.4536
SGAI 0.96320.98970.95160.84860.96911.01590.96981.00441.02561.2034
LVGI 0.94341.48960.38521.55371.12611.06861.09211.11521.05730.6843
TATA -0.0377-0.3958-0.0182-0.0202-0.0141-0.0274-0.0158-0.0484-0.0573-0.038
M-score -2.56-4.66-2.36-2.45-2.53-2.59-2.48-2.75-2.91-2.05

Coca-Cola European Partners PLC Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.05320.90030.88110.90810.96360.99191.47021.28421.03250.9144
GMI 0.97090.97250.98130.99320.98060.96950.97260.96060.9430.9515
AQI 0.98830.95650.98231.03091.02361.02191.32411.24231.2281.2975
SGI 0.97530.93790.87390.83220.88610.90691.03291.30321.44171.6169
DEPI 0.87040.83650.89231.06071.0041.10642.07611.57291.45361.1521
SGAI 1.00441.03841.00781.04211.02561.05881.1341.09771.20341.1661
LVGI 1.11521.14081.10241.07871.05731.00610.69830.6980.68430.6663
TATA -0.0484-0.0651-0.0736-0.0949-0.0573-0.0545-0.0216-0.025-0.038-0.0368
M-score -2.75-3.04-3.11-3.18-2.91-2.83-1.80-1.84-2.05-1.99
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