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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 -2.63 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:
During the past 11 years, the highest Beneish M-Score of Alcoa was -1.10. The lowest was -3.00. And the median was -2.39.
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.
Alcoa Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Beneish M-Score | Get a 7-Day Free Trial | -2.96 | -2.66 | -2.12 | -2.40 | -1.96 |
Alcoa Quarterly Data | ||||||||||||||||||||
Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | |
Beneish M-Score | Get a 7-Day Free Trial | -1.10 | -1.20 | -1.96 | -2.09 | -2.63 |
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.
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.
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:
M | = | -4.84 | + | 0.92 * DSRI | + | 0.528 * GMI | + | 0.404 * AQI | + | 0.892 * SGI | + | 0.115 * DEPI |
= | -4.84 | + | 0.92 * 1.3532 | + | 0.528 * 0.7744 | + | 0.404 * 0.9508 | + | 0.892 * 0.9847 | + | 0.115 * 0.9401 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 1.1816 | + | 4.679 * -0.042427 | - | 0.327 * 1.2635 | |||||||
= | -2.63 |
* 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 (Jun24) TTM: | Last Year (Jun23) TTM: |
Total Receivables was $1,074 Mil. Revenue was 2906 + 2599 + 2595 + 2602 = $10,702 Mil. Gross Profit was 373 + 195 + 170 + 133 = $871 Mil. Total Current Assets was $4,903 Mil. Total Assets was $14,307 Mil. Property, Plant and Equipment(Net PPE) was $6,503 Mil. Depreciation, Depletion and Amortization(DDA) was $650 Mil. Selling, General, & Admin. Expense(SGA) was $249 Mil. Total Current Liabilities was $3,166 Mil. Long-Term Debt & Capital Lease Obligation was $2,469 Mil. Net Income was 20 + -252 + -150 + -168 = $-550 Mil. Non Operating Income was 4 + -261 + 90 + -107 = $-274 Mil. Cash Flow from Operations was 287 + -223 + 198 + 69 = $331 Mil. |
Total Receivables was $806 Mil. Revenue was 2684 + 2670 + 2663 + 2851 = $10,868 Mil. Gross Profit was 169 + 266 + 67 + 183 = $685 Mil. Total Current Assets was $4,670 Mil. Total Assets was $14,128 Mil. Property, Plant and Equipment(Net PPE) was $6,445 Mil. Depreciation, Depletion and Amortization(DDA) was $602 Mil. Selling, General, & Admin. Expense(SGA) was $214 Mil. Total Current Liabilities was $2,596 Mil. Long-Term Debt & Capital Lease Obligation was $1,808 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) |
= | (1074 / 10702) | / | (806 / 10868) | |
= | 0.100355 | / | 0.074163 | |
= | 1.3532 |
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) | |
= | (685 / 10868) | / | (871 / 10702) | |
= | 0.063029 | / | 0.081387 | |
= | 0.7744 |
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 - (4903 + 6503) / 14307) | / | (1 - (4670 + 6445) / 14128) | |
= | 0.202768 | / | 0.213264 | |
= | 0.9508 |
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 | |
= | 10702 | / | 10868 | |
= | 0.9847 |
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)) |
= | (602 / (602 + 6445)) | / | (650 / (650 + 6503)) | |
= | 0.085426 | / | 0.090871 | |
= | 0.9401 |
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) |
= | (249 / 10702) | / | (214 / 10868) | |
= | 0.023267 | / | 0.019691 | |
= | 1.1816 |
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) |
= | ((2469 + 3166) / 14307) | / | ((1808 + 2596) / 14128) | |
= | 0.393863 | / | 0.311721 | |
= | 1.2635 |
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 | |
= | (-550 - -274 | - | 331) | / | 14307 | |
= | -0.042427 |
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 -2.63 suggests that the company is unlikely to be a manipulator.
Thank you for viewing the detailed overview of Alcoa's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Tammi A Jones | officer: EVP & CHRO | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Renee Henry | officer: SVP & Controller | 201 ISABELLA STREET, STE 500, PITTSBURGH PA 15212 |
Nicol Gagstetter | officer: EVP & Chief Ext. Aff. Officer | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Andrew Hastings | officer: EVP & Gen. Counsel | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
De Oliveira Marques Roberto | director | C/O MONDELEZ INTERNATIONAL, INC., THREE PARKWAY NORTH, DEERFIELD IL 60048 |
Roy Christopher Harvey | director, officer: President, CEO & Director | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Renato Bacchi | officer: EVP & Chief Strategy Officer | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Harden Sonya Elam | officer: EVP & Chief Ext. Aff. Officer | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
William F Oplinger | officer: Executive VP & CFO | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Jeffrey D. Heeter | officer: EVP, Gen. Counsel & Secretary | C/O ALCOA CORPORATION, 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Jackson Prince Roberts | director | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
John D Slaven | officer: EVP & Chief Strategy Officer | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212-5858 |
Kelly R. Thomas | officer: EVP & Chief Commercial Officer | 25825 SCIENCE PARK DRIVE, SUITE 400, BEACHWOOD OH 44122 |
Molly S. Beerman | officer: Vice President and Controller | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
Benjamin D Kahrs | officer: EVP, Chief Innovation Officer | 201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
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