Alcoa Beneish M Score

AA
 Stock
  

USD 48.65  0.87  1.76%   

This module uses fundamental data of Alcoa Corp to approximate the value of its Beneish M Score. Alcoa Corp M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please continue to Alcoa Corp Piotroski F Score and Alcoa Corp Altman Z Score analysis.
  
Alcoa Corp Debt Current is projected to decrease significantly based on the last few years of reporting. The past year's Debt Current was at 1,000,000. The current year Debt to Equity Ratio is expected to grow to 1.96, whereas Total Debt is forecasted to decline to about 1.7 B. Alcoa Corp Interest Coverage is projected to slightly grow based on the last few years of reporting. The past year's Interest Coverage was at 4.67. The current year Receivables Turnover is expected to grow to 17.36, whereas Long Term Debt to Equity is forecasted to decline to 0.33.
At this time, it appears that Alcoa Corp is an unlikely manipulator. The earnings manipulation may begin if Alcoa Corp's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Alcoa Corp executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Alcoa Corp's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.4
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.12Focus
Asset Quality0.74Focus
Expense Coverage1.18Focus
Gross Margin Strengs0.97Focus
Accruals Factor1.18Focus
Depreciation Resistance1.05Focus
Net Sales Growth0.92Focus
Financial Leverage Condition1.08Focus

Alcoa Corp Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Alcoa Corp's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues11.2 B12.2 B
Significantly Down
Decreasing
Slightly volatile
Selling General and Administrative Expense247.6 M227 M
Significantly Up
Decreasing
Slightly volatile
Net Cash Flow from Operations839.9 M920 M
Significantly Down
Increasing
Stable
Depreciation Amortization and Accretion676.6 M664 M
Fairly Up
Decreasing
Slightly volatile
Total Assets14.7 B15 B
Fairly Down
Decreasing
Slightly volatile
Investments1.2 B1.2 B
Slightly Down
Decreasing
Slightly volatile
Investments Non Current1.2 B1.2 B
Slightly Down
Decreasing
Slightly volatile
Property Plant and Equipment Net7.1 B6.6 B
Significantly Up
Decreasing
Slightly volatile
Trade and Non Trade Receivables913.7 M884 M
Sufficiently Up
Increasing
Slightly volatile
Total Liabilities9.4 B8.7 B
Notably Up
Increasing
Slightly volatile
Current Assets4.8 BB
Sufficiently Down
Increasing
Slightly volatile
Assets Non Current10.5 B10 B
Sufficiently Up
Decreasing
Slightly volatile
Current Liabilities3.3 B3.2 B
Sufficiently Up
Increasing
Slightly volatile
Liabilities Non CurrentB5.5 B
Significantly Up
Increasing
Slightly volatile
Total Debt1.7 B1.7 B
Slightly Down
Increasing
Slightly volatile
Debt CurrentM1000 K
Fairly Up
Decreasing
Slightly volatile
Debt Non Current1.7 B1.7 B
Slightly Down
Increasing
Slightly volatile
Operating Income1.5 B1.4 B
Significantly Up
Increasing
Slightly volatile
Gross Margin0.240.247
Fairly Down
Increasing
Slightly volatile

Alcoa Corp Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Alcoa Corp's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Alcoa Corp in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Alcoa Corp's degree of accounting gimmicks and manipulations.

About Alcoa Corp Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Cost of Revenue

8.71 Billion

Alcoa Corp Cost of Revenue is projected to decrease significantly based on the last few years of reporting. The past year's Cost of Revenue was at 9.15 Billion

Alcoa Corp Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Alcoa Corp. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues11.65 B13.4 B10.43 B9.29 B12.15 B11.22 B
Total Assets17.45 B16.13 B14.63 B14.86 B15.03 B14.75 B
Current Assets4.24 B4.33 B3.53 B4.52 B5.03 B4.84 B
Assets Non Current13.21 B11.8 B11.1 B10.34 B10 B10.51 B
Total Liabilities10.65 B8.54 B8.74 B9.84 B8.74 B9.38 B
Current Liabilities3.25 B2.92 B2.56 B2.76 B3.22 B3.34 B
Total Debt1.4 B1.8 B1.8 B2.46 B1.73 B1.72 B
Debt Current18 M21 M16 M1,000 K2 M1.03 M
Debt Non Current1.39 B1.8 B1.8 B2.46 B1.73 B1.71 B
Operating Income1.33 B1.75 B(317 M)319 M1.39 B1.5 B
Investments1.41 B1.36 B1.11 B1.05 B1.2 B1.2 B
Gross Margin0.160.230.250.180.140.24

About Alcoa Corp Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Alcoa Corp's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Alcoa Corp using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Alcoa Corp based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania. Alcoa Corp operates under Aluminum classification in the United States and is traded on New York Stock Exchange. It employs 12200 people.

Alcoa Corp Investors Sentiment

The influence of Alcoa Corp's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Alcoa. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Alcoa Corp Implied Volatility

    
  46.82  
Alcoa Corp's implied volatility exposes the market's sentiment of Alcoa Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Alcoa Corp's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Alcoa Corp stock will not fluctuate a lot when Alcoa Corp's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Alcoa Corp in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Alcoa Corp's short interest history, or implied volatility extrapolated from Alcoa Corp options trading.

Pair Trading with Alcoa Corp

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Alcoa Corp position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alcoa Corp will appreciate offsetting losses from the drop in the long position's value.

Moving together with Alcoa Corp

0.89CENXCentury Aluminum C Earnings Call  TomorrowPairCorr
0.89AMRAlpha Metallurgical Upward RallyPairCorr
The ability to find closely correlated positions to Alcoa Corp could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Alcoa Corp when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Alcoa Corp - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Alcoa Corp to buy it.
The correlation of Alcoa Corp is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Alcoa Corp moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Alcoa Corp moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Alcoa Corp can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Please continue to Alcoa Corp Piotroski F Score and Alcoa Corp Altman Z Score analysis. Note that the Alcoa Corp information on this page should be used as a complementary analysis to other Alcoa Corp's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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When running Alcoa Corp price analysis, check to measure Alcoa Corp's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Alcoa Corp is operating at the current time. Most of Alcoa Corp's value examination focuses on studying past and present price action to predict the probability of Alcoa Corp's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Alcoa Corp's price. Additionally, you may evaluate how the addition of Alcoa Corp to your portfolios can decrease your overall portfolio volatility.
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Is Alcoa Corp's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Alcoa Corp. If investors know Alcoa will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Alcoa Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Alcoa Corp is measured differently than its book value, which is the value of Alcoa that is recorded on the company's balance sheet. Investors also form their own opinion of Alcoa Corp's value that differs from its market value or its book value, called intrinsic value, which is Alcoa Corp's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Alcoa Corp's market value can be influenced by many factors that don't directly affect Alcoa Corp's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Alcoa Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine Alcoa Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Alcoa Corp's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.