Manila Electric Co (Manila Electric Co) Beneish M-Score

: -2.78 (As of Today)

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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.78 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Manila Electric Co's Beneish M-Score or its related term are showing as below:

MERVF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.09 Med: -2.71 Max: -1.77
Current: -2.78

During the past 13 years, the highest Beneish M-Score of Manila Electric Co was -1.77. The lowest was -3.09. And the median was -2.71.

Manila Electric Co Beneish M-Score Historical Data

The historical data trend for Manila Electric Co's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Manila Electric Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

-2.68

-1.77

-2.92

-2.07

-2.78

Manila Electric Co Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score																-2.07	-2.07	-2.16	-2.62	-2.78

Competitive Comparison

For the Utilities - Regulated Electric subindustry, Manila Electric Co's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Manila Electric Co Beneish M-Score Distribution

For the Utilities - Regulated industry and Utilities sector, Manila Electric Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Manila Electric Co's Beneish M-Score falls into.

Manila Electric Co Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Manila Electric Co for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.8509

0.528 * 0.8309

0.404 * 1.1176

0.892 * 1.0401

0.115 * 1.0651

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1179

4.679 * -0.034044

0.327 * 0.954

-2.78

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $841 Mil.
Revenue was 1883.397 + 1918.674 + 2071.023 + 1835.8 = $7,709 Mil.
Gross Profit was 364.859 + 393.115 + 400.588 + 337.142 = $1,496 Mil.
Total Current Assets was $2,828 Mil.
Total Assets was $10,184 Mil.
Property, Plant and Equipment(Net PPE) was $4,689 Mil.
Depreciation, Depletion and Amortization(DDA) was $289 Mil.
Selling, General, & Admin. Expense(SGA) was $19 Mil.
Total Current Liabilities was $4,054 Mil.
Long-Term Debt & Capital Lease Obligation was $1,082 Mil.
Net Income was 167.242 + 183.264 + 169.987 + 140.254 = $661 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 365.902 + 517.26 + 137.039 + -12.755 = $1,007 Mil.

Total Receivables was $950 Mil.
Revenue was 1940.118 + 2003.25 + 1975.846 + 1492.819 = $7,412 Mil.
Gross Profit was 275.261 + 283.793 + 317.679 + 318.201 = $1,195 Mil.
Total Current Assets was $2,681 Mil.
Total Assets was $9,023 Mil.
Property, Plant and Equipment(Net PPE) was $4,228 Mil.
Depreciation, Depletion and Amortization(DDA) was $279 Mil.
Selling, General, & Admin. Expense(SGA) was $17 Mil.
Total Current Liabilities was $3,575 Mil.
Long-Term Debt & Capital Lease Obligation was $1,195 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(840.987 / 7708.894)	/	(950.257 / 7412.033)
	=	0.109093	/	0.128205
	=	0.8509

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)
	=	(1194.934 / 7412.033)	/	(1495.704 / 7708.894)
	=	0.161215	/	0.194023
	=	0.8309

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (2828.354 + 4689.144) / 10183.98)	/	(1 - (2681.132 + 4228.36) / 9023.489)
	=	0.261831	/	0.234277
	=	1.1176

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	7708.894	/	7412.033
	=	1.0401

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(278.579 / (278.579 + 4228.36))	/	(288.902 / (288.902 + 4689.144))
	=	0.061811	/	0.058035
	=	1.0651

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(19.22 / 7708.894)	/	(16.527 / 7412.033)
	=	0.002493	/	0.00223
	=	1.1179

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((1082.135 + 4053.716) / 10183.98)	/	((1194.829 + 3574.999) / 9023.489)
	=	0.504307	/	0.528601
	=	0.954

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
	=	(660.747 - 0	-	1007.446)	/	10183.98
	=	-0.034044

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Manila Electric Co has a M-score of -2.78 suggests that the company is unlikely to be a manipulator.

Manila Electric Co Beneish M-Score Related Terms

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Manila Electric Co (Manila Electric Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Manila Electric Co (OTCPK:MERVF) » Definitions » Beneish M-Score

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Traded in Other Exchanges

MAEOY:USA MER:Philippines

Address

Ortigas Avenue, Barangay Ugong, Lopez Building, Pasig, PHL, 1605

Website

https://www.meralco.com.ph

Manila Electric Co, or Meralco, is an electric utility company serving the Philippines. Meralco generates, transmits, and distributes electricity through its portfolio of thermal power plants. The vast majority of the energy produced by the company comes from its natural gas and goal facilities. Meralco generates almost all of its revenue through the sale of electricity. While nearly all of the company's customers are residential entities, total energy sales are split fairly evenly between commercial, industrial, and residential customers. Meralco is the largest electric distribution company in the Philippines and serves dozens of cities and municipalities, including Metropolitan Manila.

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