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GuruFocus has detected 2 Warning Signs with Consol Energy Inc $CNX.
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Consol Energy Inc (NYSE:CNX)
Beneish M-Score
-2.59 (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.

Consol Energy Inc has a M-score of -2.59 suggests that the company is not a manipulator.

CNX' s Beneish M-Score Range Over the Past 10 Years
Min: -4.61   Max: -1.25
Current: -2.59

-4.61
-1.25

During the past 13 years, the highest Beneish M-Score of Consol Energy Inc was -1.25. The lowest was -4.61. And the median was -2.76.


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 Consol Energy Inc 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 * 1.4594+0.528 * 1.4687+0.404 * 1.1378+0.892 * 0.8892+0.115 * 0.858
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.621+4.679 * -0.1321-0.327 * 0.9935
=-2.59

* 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 $215 Mil.
Revenue was 698.709 + 462.022 + 745.578 + 285.8 = $2,192 Mil.
Gross Profit was 352.423 + 99.103 + 415.104 + -73.036 = $794 Mil.
Total Current Assets was $616 Mil.
Total Assets was $9,064 Mil.
Property, Plant and Equipment(Net PPE) was $7,987 Mil.
Depreciation, Depletion and Amortization(DDA) was $592 Mil.
Selling, General & Admin. Expense(SGA) was $400 Mil.
Total Current Liabilities was $993 Mil.
Long-Term Debt was $2,657 Mil.
Net Income was -38.966 + -306.044 + 25.345 + -469.828 = $-789 Mil.
Non Operating Income was -137.043 + 0 + 0 + 0 = $-137 Mil.
Cash Flow from Operations was 205.119 + 82.647 + 162.897 + 93.789 = $544 Mil.
Accounts Receivable was $166 Mil.
Revenue was 532.828 + 665.983 + 720.933 + 545.574 = $2,465 Mil.
Gross Profit was 227.733 + 423.036 + 450.925 + 209.086 = $1,311 Mil.
Total Current Assets was $1,146 Mil.
Total Assets was $10,716 Mil.
Property, Plant and Equipment(Net PPE) was $9,090 Mil.
Depreciation, Depletion and Amortization(DDA) was $572 Mil.
Selling, General & Admin. Expense(SGA) was $278 Mil.
Total Current Liabilities was $1,585 Mil.
Long-Term Debt was $2,759 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)
=(215.329 / 2192.109) / (165.941 / 2465.318)
=0.09822915 / 0.06731018
=1.4594

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)
=(1310.78 / 2465.318) / (793.594 / 2192.109)
=0.531688 / 0.36202306
=1.4687

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 - (616.215 + 7986.541) / 9063.769) / (1 - (1146.443 + 9090.391) / 10715.87)
=0.05086328 / 0.04470342
=1.1378

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
=2192.109 / 2465.318
=0.8892

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))
=(572.399 / (572.399 + 9090.391)) / (592.268 / (592.268 + 7986.541))
=0.05923745 / 0.06903849
=0.858

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)
=(400.377 / 2192.109) / (277.783 / 2465.318)
=0.18264466 / 0.11267634
=1.621

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)
=((2657.294 + 992.849) / 9063.769) / ((2758.961 + 1584.931) / 10715.87)
=0.40271801 / 0.40536998
=0.9935

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
=(-789.493 - -137.043 - 544.452) / 9063.769
=-0.1321

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.

Consol Energy Inc has a M-score of -2.59 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.

Consol Energy Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.62050.9761.60861.08711.22341.19890.79510.8080.69011.9335
GMI 1.19140.9170.82561.06460.7970.96061.35830.59240.99331.6076
AQI 0.72090.93371.00810.80641.51750.93870.45520.76961.22041.0899
SGI 0.95971.25831.03021.13290.83590.84020.89730.9710.84060.7524
DEPI 1.11150.97110.95251.25811.21091.09710.79961.01020.89890.8089
SGAI 1.24220.91091.01871.45590.71894.12890.54683.35310.50151.8598
LVGI 1.11381.10790.91031.64330.9070.96251.07161.00091.07570.9959
TATA -0.1037-0.1071-0.067-0.065-0.0715-0.02610.0001-0.05820.0015-0.1434
M-score -3.43-2.87-2.27-2.89-2.55-3.12-2.76-3.67-2.77-2.32

Consol Energy Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.8080.82631.03191.16030.68210.78480.86830.76391.95651.4594
GMI 0.48540.63360.65910.61011.03781.0331.16941.36041.61491.4687
AQI 0.76960.91050.85851.11121.22041.09241.58521.63111.08991.1378
SGI 0.9710.88370.74560.68360.85050.81430.83680.90220.74350.8892
DEPI 1.01021.00950.99481.03660.89890.85530.84660.81640.80890.858
SGAI 4.09314.20653.89373.34570.41620.51560.56850.70482.05811.621
LVGI 1.00091.02341.13621.07511.07571.05930.93570.96530.99590.9935
TATA -0.0582-0.0458-0.01220.01510.07730.0652-0.0025-0.0179-0.1434-0.1321
M-score -3.85-3.75-3.51-3.13-2.37-2.44-2.35-2.38-2.34-2.59
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