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Cummins Beneish M-Score

: -2.49 (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 -2.49 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

CMI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.09   Med: -2.57   Max: -1.75
Current: -2.49

During the past 13 years, the highest Beneish M-Score of Cummins was -1.75. The lowest was -3.09. And the median was -2.57.


Cummins Beneish M-Score Historical Data

The historical data trend for Cummins'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.

Cummins Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.65 -2.57 -2.84 -2.75 -2.50

Cummins Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.69 -2.54 -2.50 -2.50 -2.49

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Cummins'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.

   

Cummins Beneish M-Score Distribution

For the Industrial Products industry and Industrials sector, Cummins's Beneish M-Score distribution charts can be found below:

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



Cummins 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 Cummins 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 * 0.9393+0.528 * 1.0144+0.404 * 1.0537+0.892 * 1.0708+0.115 * 1.0686
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9969+4.679 * -0.011-0.327 * 1.0041
=-2.49

* 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.

This Year (Jun22) TTM:Last Year (Jun21) TTM:
Total Receivables was $4,156 Mil.
Revenue was 6586 + 6385 + 5850 + 5968 = $24,789 Mil.
Gross Profit was 1726 + 1532 + 1317 + 1414 = $5,989 Mil.
Total Current Assets was $12,762 Mil.
Total Assets was $24,477 Mil.
Property, Plant and Equipment(Net PPE) was $4,819 Mil.
Depreciation, Depletion and Amortization(DDA) was $653 Mil.
Selling, General, & Admin. Expense(SGA) was $2,437 Mil.
Total Current Liabilities was $7,671 Mil.
Long-Term Debt & Capital Lease Obligation was $3,805 Mil.
Net Income was 702 + 418 + 394 + 534 = $2,048 Mil.
Non Operating Income was 47 + -10 + 109 + 108 = $254 Mil.
Cash Flow from Operations was 599 + 164 + 732 + 569 = $2,064 Mil.
Total Receivables was $4,132 Mil.
Revenue was 6111 + 6092 + 5830 + 5118 = $23,151 Mil.
Gross Profit was 1478 + 1486 + 1361 + 1349 = $5,674 Mil.
Total Current Assets was $11,931 Mil.
Total Assets was $22,608 Mil.
Property, Plant and Equipment(Net PPE) was $4,632 Mil.
Depreciation, Depletion and Amortization(DDA) was $677 Mil.
Selling, General, & Admin. Expense(SGA) was $2,283 Mil.
Total Current Liabilities was $6,604 Mil.
Long-Term Debt & Capital Lease Obligation was $3,952 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)
=(4156 / 24789) / (4132 / 23151)
=0.16765501 / 0.17848041
=0.9393

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)
=(5674 / 23151) / (5989 / 24789)
=0.24508661 / 0.2415991
=1.0144

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 - (12762 + 4819) / 24477) / (1 - (11931 + 4632) / 22608)
=0.28173387 / 0.26738323
=1.0537

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
=24789 / 23151
=1.0708

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))
=(677 / (677 + 4632)) / (653 / (653 + 4819))
=0.12751931 / 0.1193348
=1.0686

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)
=(2437 / 24789) / (2283 / 23151)
=0.09830973 / 0.09861345
=0.9969

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)
=((3805 + 7671) / 24477) / ((3952 + 6604) / 22608)
=0.46884831 / 0.46691437
=1.0041

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
=(2048 - 254 - 2064) / 24477
=-0.011

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.

Cummins has a M-score of -2.49 suggests that the company is unlikely to be a manipulator.


Cummins Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Cummins's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Cummins Business Description

Cummins logo
Address
500 Jackson Street, Box 3005, Columbus, IN, USA, 47202-3005
Cummins is the top manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, in addition to standby and prime power generators. The company also sells powertrain components, which include filtration products, transmissions, turbochargers, aftertreatment systems, and fuel systems. Cummins is in the unique position of competing with its primary customers, heavy-duty truck manufacturers, who make and aggressively market their own engines. Despite robust competition across all its segments and increasing government regulation of diesel emissions, Cummins has maintained its leadership position in the industry.
Executives
Peters Luther E officer: VP - Corporate Controller 500 JACKSON STREET COLUMBUS IN 47201
Fetch Bonnie J officer: VP - Supply Chain 500 JACKSON STREET COLUMBUS IN 47201
Wiltrout Jeffrey T officer: VP - Corporate Strategy 500 JACKSON STREET COLUMBUS IN 47201
Harris Carla A director 702 SW 8TH STREET BENTONVILLE AR 72716
Lamb-hale Nicole officer: VP - General Counsel 909 ROSE AVENUE SUITE 200 NORTH BETHESDA MD 20852
Newsome Earl officer: VP - Chief Information Officer 505 HUNTMAR PARK DR SUITE 300 HERNDON VA 20170
Brockhaus John D officer: VP-Human Resources Operations 500 JACKSON STREET COLUMBUS IN 47201
Narang Mahesh officer: VP & President - Components 500 JACKSON STREET COLUMBUS IN 47201
Chandler Mary T officer: VP - Corp. Resp. & Comm. Rel. 500 JACKSON STREET COLUMBUS IN 47201
Nelson Kimberly A director ONE GENERAL MILLS BLVD MINNEAPOLIS MN 55426
Davis Amy Rochelle officer: VP & Pres. - New Power Segment 500 JACKSON STREET COLUMBUS IN 47201
Stoner Nathan R officer: VP - China Area Business Org 500 JACKSON STREET COLUMBUS IN 47201
Kennedy Melina M officer: VP-Product Compl.-Reg. Affairs 301 EAST MARKET STREET INDIANAPOLIS IN 46204
Fier Walter J officer: VP - Chief Technical Officer 500 CENTRAL AVENUE COLUMBUS IN 47201
Quintos Karen H director ONE DELL WAY ROUND ROCK TX 78682

Cummins Headlines

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