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GuruFocus has detected 4 Warning Signs with Carbo Ceramics Inc $CRR.
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Carbo Ceramics Inc (NYSE:CRR)
Beneish M-Score
-3.56 (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.

Carbo Ceramics Inc has a M-score of -3.56 suggests that the company is not a manipulator.

CRR' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 268.41
Current: -3.56

-10000000
268.41

During the past 13 years, the highest Beneish M-Score of Carbo Ceramics Inc was 268.41. The lowest was -10000000.00. And the median was -2.53.


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 Carbo Ceramics 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 * 1.1696+0.528 * 0.2913+0.404 * 1.3992+0.892 * 0.4379+0.115 * 1.0102
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5504+4.679 * -0.0859-0.327 * 1.0903
=-3.56

* 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 $32.1 Mil.
Revenue was 34.67 + 29.058 + 20.241 + 20.651 = $104.6 Mil.
Gross Profit was -19.458 + -20.495 + -20.865 + -20.012 = $-80.8 Mil.
Total Current Assets was $189.2 Mil.
Total Assets was $691.3 Mil.
Property, Plant and Equipment(Net PPE) was $483.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.6 Mil.
Selling, General & Admin. Expense(SGA) was $39.3 Mil.
Total Current Liabilities was $21.4 Mil.
Long-Term Debt was $73.0 Mil.
Net Income was -32.444 + -15.197 + -19.95 + -20.296 = $-87.9 Mil.
Non Operating Income was 0.187 + -0.004 + 0.05 + 0.008 = $0.2 Mil.
Cash Flow from Operations was -19.071 + -12.65 + -14.719 + 17.729 = $-28.7 Mil.
Accounts Receivable was $62.6 Mil.
Revenue was 33.102 + 56.768 + 75.807 + 73.252 = $238.9 Mil.
Gross Profit was -23.641 + -15.228 + -4.597 + -10.302 = $-53.8 Mil.
Total Current Assets was $216.1 Mil.
Total Assets was $759.5 Mil.
Property, Plant and Equipment(Net PPE) was $528.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $53.8 Mil.
Selling, General & Admin. Expense(SGA) was $57.9 Mil.
Total Current Liabilities was $42.4 Mil.
Long-Term Debt was $52.7 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)
=(32.062 / 104.62) / (62.607 / 238.929)
=0.30646148 / 0.26203182
=1.1696

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)
=(-53.768 / 238.929) / (-80.83 / 104.62)
=-0.22503756 / -0.77260562
=0.2913

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 - (189.205 + 483.203) / 691.303) / (1 - (216.07 + 528.616) / 759.523)
=0.02733244 / 0.01953463
=1.3992

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
=104.62 / 238.929
=0.4379

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))
=(53.754 / (53.754 + 528.616)) / (48.59 / (48.59 + 483.203))
=0.09230214 / 0.09137014
=1.0102

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)
=(39.322 / 104.62) / (57.924 / 238.929)
=0.37585548 / 0.24243185
=1.5504

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)
=((72.957 + 21.418) / 691.303) / ((52.651 + 42.448) / 759.523)
=0.13651756 / 0.12520885
=1.0903

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
=(-87.887 - 0.241 - -28.711) / 691.303
=-0.0859

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.

Carbo Ceramics Inc has a M-score of -3.56 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.

Carbo Ceramics Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.76560.92941.09511.08620.94590.89351.17261.09020.851.3187
GMI 1.07781.01450.95010.95470.88271.20811.19731.0342-1.39280.2433
AQI 0.2260.97842.92820.84241.57630.65680.81640.90410.53491.0496
SGI 1.0571.3770.82761.38381.32261.03171.03390.97140.43120.3686
DEPI 0.86750.79681.0851.11260.90120.88171.05581.09940.89271.0298
SGAI 1.08641.07281.10780.94730.88230.99311.03221.10091.9971.7226
LVGI 0.86742.08850.41231.3521.24860.58881.02631.28481.80780.9431
TATA 0.00870.05440.0601-0.02110.0257-0.0619-0.0604-0.0537-0.2153-0.0861
M-score -2.86-2.35-1.33-2.34-2.02-2.75-2.55-2.79-6.03-3.63

Carbo Ceramics Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.09020.74810.77150.8790.852.1870.80090.96781.31871.1696
GMI 1.03421.50853.0316516.987-1.3928-0.8594-0.2932-0.00090.24330.2913
AQI 0.90411.1121.08180.94130.53490.50350.54580.49171.04961.3992
SGI 0.97140.85820.68030.60550.43120.41660.39630.33480.36860.4379
DEPI 1.09941.03640.9360.92050.89270.89860.94470.96571.02981.0102
SGAI 1.10091.241.37871.47971.9971.91121.9762.2351.72261.5504
LVGI 1.28481.70872.23381.84861.80781.02331.02780.97120.94311.0903
TATA -0.0537-0.1128-0.1469-0.1488-0.2153-0.1513-0.1745-0.149-0.0861-0.0859
M-score -2.79-3.32-3.03268.41-6.03-3.97-5.07-4.74-3.63-3.56
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