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GuruFocus has detected 2 Warning Signs with Goldcorp Inc $GG.
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Goldcorp Inc (NYSE:GG)
Beneish M-Score
-2.20 (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.

Goldcorp Inc has a M-score of -2.20 signals that the company is a manipulator.

GG' s Beneish M-Score Range Over the Past 10 Years
Min: -6.82   Max: 6.51
Current: -2.2

-6.82
6.51

During the past 13 years, the highest Beneish M-Score of Goldcorp Inc was 6.51. The lowest was -6.82. And the median was -2.43.


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 Goldcorp 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 * 0.3053+0.528 * 0.7625+0.404 * 4.2429+0.892 * 0.8015+0.115 * 1.2793
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.991+4.679 * -0.0307-0.327 * 0.939
=-2.20

* 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 $127 Mil.
Revenue was 882 + 898 + 915 + 753 = $3,448 Mil.
Gross Profit was 116 + 128 + 125 + 22 = $391 Mil.
Total Current Assets was $1,722 Mil.
Total Assets was $21,583 Mil.
Property, Plant and Equipment(Net PPE) was $17,502 Mil.
Depreciation, Depletion and Amortization(DDA) was $999 Mil.
Selling, General & Admin. Expense(SGA) was $166 Mil.
Total Current Liabilities was $1,318 Mil.
Long-Term Debt was $2,327 Mil.
Net Income was 170 + 101 + 59 + -78 = $252 Mil.
Non Operating Income was 14 + -84 + 6 + 12 = $-52 Mil.
Cash Flow from Operations was 227 + 239 + 267 + 234 = $967 Mil.
Accounts Receivable was $519 Mil.
Revenue was 944 + 1072 + 1098 + 1188 = $4,302 Mil.
Gross Profit was 145 + -11 + 46 + 192 = $372 Mil.
Total Current Assets was $1,520 Mil.
Total Assets was $21,506 Mil.
Property, Plant and Equipment(Net PPE) was $19,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,442 Mil.
Selling, General & Admin. Expense(SGA) was $209 Mil.
Total Current Liabilities was $875 Mil.
Long-Term Debt was $2,993 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)
=(127 / 3448) / (519 / 4302)
=0.03683295 / 0.12064156
=0.3053

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)
=(372 / 4302) / (391 / 3448)
=0.08647141 / 0.11339907
=0.7625

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 - (1722 + 17502) / 21583) / (1 - (1520 + 19432) / 21506)
=0.10929899 / 0.02576025
=4.2429

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
=3448 / 4302
=0.8015

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))
=(1442 / (1442 + 19432)) / (999 / (999 + 17502))
=0.06908115 / 0.05399708
=1.2793

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)
=(166 / 3448) / (209 / 4302)
=0.04814385 / 0.04858205
=0.991

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)
=((2327 + 1318) / 21583) / ((2993 + 875) / 21506)
=0.16888292 / 0.17985678
=0.939

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
=(252 - -52 - 967) / 21583
=-0.0307

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.

Goldcorp Inc has a M-score of -2.20 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.

Goldcorp Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.78681.05431.38681.16040.63281.61891.0680.88240.14551.6221
GMI 1.09811.81650.84280.83510.90681.07961.57421.63932.54660.5769
AQI 0.5641.01731.02981.59710.71760.97280.9691.6860.98380.9552
SGI 1.29051.09641.12561.37241.43450.86910.77450.95211.27330.8023
DEPI 0.78050.94541.00111.12410.90591.29440.88130.75360.41551.4173
SGAI 1.24070.8990.90261.00730.86761.2311.24381.09930.65821.126
LVGI 1.0250.36112.68280.83980.83471.22812.00571.4731.00250.929
TATA -0.0136-0.036-0.0353-0.0016-0.0282-0.0101-0.1227-0.112-0.2723-0.0258
M-score -1.76-1.85-2.78-1.79-2.66-2.12-3.29-2.74-3.50-2.40

Goldcorp Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.88241.09490.9340.71440.14550.81380.82050.32511.62210.3053
GMI 1.63932.03842.39362.90592.54661.47832.15671.11210.57690.7625
AQI 1.6860.59140.6170.59420.98380.6380.60892.71060.95524.2429
SGI 0.95211.01481.0931.18471.27331.20340.99690.89030.80230.8015
DEPI 0.75360.71750.59520.52560.41550.50890.67150.7961.41731.2793
SGAI 1.09930.9610.88420.78310.65820.73590.89841.0151.1260.991
LVGI 1.4731.2591.09660.96391.00251.03791.07971.24940.9290.939
TATA -0.112-0.1097-0.1265-0.1451-0.2723-0.2633-0.2551-0.2324-0.0252-0.0307
M-score -2.74-2.62-2.53-2.42-3.50-3.62-3.44-3.64-2.39-2.20
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