Alcoa (WBO:ALCA) Beneish M-Score : -2.79 (As of Dec. 12, 2024)

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What is Alcoa Beneish M-Score?

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 -2.79 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WBO:ALCA' s Beneish M-Score Range Over the Past 10 Years
Min: -3 Med: -2.4 Max: -1.1
Current: -2.79

During the past 11 years, the highest Beneish M-Score of Alcoa was -1.10. The lowest was -3.00. And the median was -2.40.

Alcoa Beneish M-Score Historical Data

The historical data trend for Alcoa'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.

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Alcoa Beneish M-Score Chart

Alcoa Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.96

-2.66

-2.12

-2.40

-1.96

Alcoa Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-1.20	-1.96	-2.09	-2.63	-2.79

Competitive Comparison of Alcoa's Beneish M-Score

For the Aluminum subindustry, Alcoa'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.

Alcoa's Beneish M-Score Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Alcoa's Beneish M-Score distribution charts can be found below:

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

Alcoa 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 Alcoa 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 * 1.1967

0.528 * 0.5271

0.404 * 0.9364

0.892 * 1.0165

0.115 * 0.9649

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1054

4.679 * -0.034336

0.327 * 1.2798

-2.83

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was €907 Mil.
Revenue was 2616.504 + 2699.674 + 2391.08 + 2379.615 = €10,087 Mil.
Gross Profit was 460.411 + 346.517 + 179.4 + 155.89 = €1,142 Mil.
Total Current Assets was €4,384 Mil.
Total Assets was €13,102 Mil.
Property, Plant and Equipment(Net PPE) was €6,056 Mil.
Depreciation, Depletion and Amortization(DDA) was €592 Mil.
Selling, General, & Admin. Expense(SGA) was €237 Mil.
Total Current Liabilities was €3,117 Mil.
Long-Term Debt & Capital Lease Obligation was €2,225 Mil.
Net Income was 81.09 + 18.58 + -231.84 + -137.55 = €-270 Mil.
Non Operating Income was -37.842 + 3.716 + -240.12 + 82.53 = €-192 Mil.
Cash Flow from Operations was 128.843 + 266.623 + -205.16 + 181.566 = €372 Mil.

Total Receivables was €746 Mil.
Revenue was 2438.074 + 2477.332 + 2493.78 + 2513.872 = €9,923 Mil.
Gross Profit was 124.621 + 155.987 + 248.444 + 63.248 = €592 Mil.
Total Current Assets was €4,090 Mil.
Total Assets was €13,040 Mil.
Property, Plant and Equipment(Net PPE) was €6,120 Mil.
Depreciation, Depletion and Amortization(DDA) was €576 Mil.
Selling, General, & Admin. Expense(SGA) was €211 Mil.
Total Current Liabilities was €2,459 Mil.
Long-Term Debt & Capital Lease Obligation was €1,695 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)
	=	(907.307 / 10086.873)	/	(745.852 / 9923.058)
	=	0.089949	/	0.075164
	=	1.1967

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)
	=	(592.3 / 9923.058)	/	(1142.218 / 10086.873)
	=	0.059689	/	0.113238
	=	0.5271

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 - (4384.266 + 6055.621) / 13102.342)	/	(1 - (4090.005 + 6120.484) / 13040.229)
	=	0.203205	/	0.217001
	=	0.9364

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
	=	10086.873	/	9923.058
	=	1.0165

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))
	=	(575.62 / (575.62 + 6120.484))	/	(592.277 / (592.277 + 6055.621))
	=	0.085963	/	0.089092
	=	0.9649

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)
	=	(237.455 / 10086.873)	/	(211.32 / 9923.058)
	=	0.023541	/	0.021296
	=	1.1054

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)
	=	((2224.569 + 3116.559) / 13102.342)	/	((1695.033 + 2458.688) / 13040.229)
	=	0.407647	/	0.318531
	=	1.2798

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
	=	(-269.72 - -191.716	-	371.872)	/	13102.342
	=	-0.034336

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.

Alcoa has a M-score of -2.83 suggests that the company is unlikely to be a manipulator.

Alcoa Beneish M-Score Related Terms

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Alcoa Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Alcoa Corp (WBO:ALCA) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

AA:USA AA1:Mexico 1AA:Italy 0HCB:UK 185:Germany AAI:Australia

Address

201 Isabella Street, Suite 500, Pittsburgh, PA, USA, 15212-5858

Website

https://www.alcoa.com

Alcoa is a vertically integrated aluminum company whose operations include bauxite mining, alumina refining, and manufacturing primary aluminum. It is the world's largest bauxite miner and alumina refiner by production volume, and the eighth-largest aluminum producer. Profits are closely tied to prevailing commodity prices along the aluminum supply chain.Alcoa was the first mass producer of aluminum, launching the world-changing Hall-Heroult smelting process in the 1880s, making aluminum affordable. It listed as a public company in 1925. In 2016, Alcoa spun off its automotive and aerospace metal parts segment to focus on mining, smelting, and refining. It bought the 40% unowned balance of AWAC in mid-2024, meaning refining assets are now predominantly wholly owned, as with smelting.

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