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GuruFocus has detected 3 Warning Signs with China Petroleum & Chemical Corp $SNP.
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China Petroleum & Chemical Corp (NYSE:SNP)
Beneish M-Score
-2.54 (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.

China Petroleum & Chemical Corp has a M-score of -2.60 suggests that the company is not a manipulator.

SNP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.57   Max: -0.1
Current: -2.54

-3.57
-0.1

During the past 13 years, the highest Beneish M-Score of China Petroleum & Chemical Corp was -0.10. The lowest was -3.57. And the median was -2.44.


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 China Petroleum & Chemical Corp 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 * 1.3177+0.528 * 1.0051+0.404 * 1.1277+0.892 * 1.0079+0.115 * 0.8387
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9413+4.679 * -0.1011-0.327 * 0.9735
=-2.60

* 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 $8,161 Mil.
Revenue was 84448.0707862 + 81933.8709211 + 72670.2347756 + 70594.1540703 = $309,646 Mil.
Gross Profit was 20797.5050769 + 22430.9951155 + 19819.6455878 + 20873.7024221 = $83,922 Mil.
Total Current Assets was $59,864 Mil.
Total Assets was $214,522 Mil.
Property, Plant and Equipment(Net PPE) was $115,311 Mil.
Depreciation, Depletion and Amortization(DDA) was $16,269 Mil.
Selling, General & Admin. Expense(SGA) was $18,922 Mil.
Total Current Liabilities was $63,820 Mil.
Long-Term Debt was $17,805 Mil.
Net Income was 2494.77806789 + 2393.85531374 + 1527.39048304 + 2011.0180295 = $8,427 Mil.
Non Operating Income was 585.726718886 + 154.628746496 + 391.74237654 + 402.628543678 = $1,535 Mil.
Cash Flow from Operations was 1925.73252103 + 11971.8777999 + 8333.78309496 + 6347.81157045 = $28,579 Mil.
Accounts Receivable was $6,145 Mil.
Revenue was 63675.2425915 + 74804.0811896 + 78023.9022552 + 90712.6281184 = $307,216 Mil.
Gross Profit was 19416.5500484 + 20458.513591 + 19513.9455996 + 24300.5866048 = $83,690 Mil.
Total Current Assets was $47,296 Mil.
Total Assets was $214,940 Mil.
Property, Plant and Equipment(Net PPE) was $132,683 Mil.
Depreciation, Depletion and Amortization(DDA) was $15,351 Mil.
Selling, General & Admin. Expense(SGA) was $19,945 Mil.
Total Current Liabilities was $62,842 Mil.
Long-Term Debt was $21,171 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)
=(8161.44473455 / 309646.330553) / (6144.98592892 / 307215.854155)
=0.02635731 / 0.02000218
=1.3177

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)
=(83689.5958439 / 307215.854155) / (83921.8482023 / 309646.330553)
=0.27241301 / 0.27102484
=1.0051

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 - (59863.5044967 + 115310.559907) / 214522.338265) / (1 - (47295.5849109 + 132682.885571) / 214939.640457)
=0.18342273 / 0.16265576
=1.1277

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
=309646.330553 / 307215.854155
=1.0079

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))
=(15351.1250401 / (15351.1250401 + 132682.885571)) / (16269.0938965 / (16269.0938965 + 115310.559907))
=0.10369999 / 0.12364445
=0.8387

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)
=(18921.6599779 / 309646.330553) / (19944.7202264 / 307215.854155)
=0.06110733 / 0.06492087
=0.9413

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)
=((17804.6127067 + 63819.9883957) / 214522.338265) / ((21170.8982423 + 62841.896443) / 214939.640457)
=0.38049465 / 0.39086692
=0.9735

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
=(8427.04189417 - 1534.7263856 - 28579.2049864) / 214522.338265
=-0.1011

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.

China Petroleum & Chemical Corp has a M-score of -2.60 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.

China Petroleum & Chemical Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.13931.04041.24660.60181.31470.73371.2214
GMI 1.18431.16471.09630.98581.01440.6680.9126
AQI 1.0371.0290.98621.21081.1141.08761.1282
SGI 1.46041.37191.13251.06090.96350.68570.8907
DEPI 0.95360.99791.01250.95390.96020.94550.8411
SGAI 0.91210.88480.97311.07511.02391.39981.0646
LVGI 1.07880.95641.09530.96611.0030.80020.9664
TATA -0.105-0.0735-0.0633-0.0667-0.0704-0.0946-0.1173
M-score -2.34-2.32-2.41-3.03-2.51-3.60-2.94

China Petroleum & Chemical Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.30030.83050.85330.82540.71860.84550.87741.14521.20591.3177
GMI 0.99930.96690.91710.80840.6680.67030.71940.78040.91161.0051
AQI 1.1141.12851.06831.1311.08761.09841.12561.08631.12821.1277
SGI 0.97410.93220.88490.77640.70010.71410.70690.78170.90221.0079
DEPI 0.95090.96250.98260.93350.92910.93850.92220.94320.83160.8387
SGAI 1.02311.05551.0821.24111.39741.37351.40381.26011.06780.9413
LVGI 1.0030.82930.82510.77950.80020.91650.92360.95350.96640.9735
TATA -0.0713-0.0787-0.0852-0.0981-0.0962-0.1177-0.1078-0.1117-0.1208-0.1011
M-score -2.53-2.99-3.09-3.32-3.61-3.61-3.51-3.18-2.96-2.60
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