Sociedad Quimica Y Minera De Chile 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 Sociedad Quimica Y Minera De Chile 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 * 0.9375 | + | 0.528 * 1.0844 | + | 0.404 * 1.1862 | + | 0.892 * 0.9349 | + | 0.115 * 1.0876 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.5068 | + | 4.679 * -0.0041 | - | 0.327 * 1.0183 |
| = | -2.58 |
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.
| This Year (Dec20) TTM: | Last Year (Dec19) TTM: |
Accounts Receivable was $376 Mil.
Revenue was 513.806 + 452.874 + 458.473 + 392.037 = $1,817 Mil.
Gross Profit was 132.511 + 114.767 + 127.847 + 107.745 = $483 Mil.
Total Current Assets was $2,569 Mil.
Total Assets was $4,818 Mil.
Property, Plant and Equipment(Net PPE) was $1,767 Mil.
Depreciation, Depletion and Amortization(DDA) was $3 Mil.
Selling, General, & Admin. Expense(SGA) was $170 Mil.
Total Current Liabilities was $476 Mil.
Long-Term Debt & Capital Lease Obligation was $1,912 Mil.
Net Income was 66.993 + 1.703 + 50.835 + 44.987 = $165 Mil.
Non Operating Income was 1.579 + 5.202 + -5.416 + 0.562 = $2 Mil.
Cash Flow from Operations was 1.737 + 53.511 + 112.999 + 13.987 = $182 Mil.
|
Accounts Receivable was $429 Mil.
Revenue was 472.219 + 473.065 + 494.132 + 504.238 = $1,944 Mil.
Gross Profit was 137.839 + 134.187 + 142.528 + 145.497 = $560 Mil.
Total Current Assets was $2,682 Mil.
Total Assets was $4,684 Mil.
Property, Plant and Equipment(Net PPE) was $1,607 Mil.
Depreciation, Depletion and Amortization(DDA) was $3 Mil.
Selling, General, & Admin. Expense(SGA) was $121 Mil.
Total Current Liabilities was $777 Mil.
Long-Term Debt & Capital Lease Obligation was $1,502 Mil.
|
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Accounts Receivable 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) |
| = | (375.866 / 1817.19) | / | (428.81 / 1943.654) |
| = | 0.20683913 | / | 0.22062054 |
| | = | 0.9375 |
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) |
| = | (560.051 / 1943.654) | / | (482.87 / 1817.19) |
| = | 0.28814336 | / | 0.26572345 |
| | = | 1.0844 |
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 - (2569.258 + 1767.343) / 4818.463) | / | (1 - (2682.166 + 1607.07) / 4684.151) |
| = | 0.10000326 | / | 0.08430877 |
| | = | 1.1862 |
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 |
| = | 1817.19 | / | 1943.654 |
| | = | 0.9349 |
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)) |
| = | (2.642 / (2.642 + 1607.07)) | / | (2.671 / (2.671 + 1767.343)) |
| = | 0.00164129 | / | 0.00150903 |
| | = | 1.0876 |
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) |
| = | (170.267 / 1817.19) | / | (120.861 / 1943.654) |
| = | 0.09369796 | / | 0.06218236 |
| | = | 1.5068 |
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) |
| = | ((1911.548 + 475.882) / 4818.463) | / | ((1502.449 + 776.812) / 4684.151) |
| = | 0.49547542 | / | 0.48658999 |
| | = | 1.0183 |
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 |
| = | (164.518 - 1.927 | - | 182.234) | / | 4818.463 |
| | = | -0.0041 |
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.
Sociedad Quimica Y Minera De Chile has a M-score of -2.58 suggests that the company is unlikely to be a manipulator.
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