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GuruFocus has detected 4 Warning Signs with Broadwind Energy Inc $BWEN.
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Broadwind Energy Inc (NAS:BWEN)
Beneish M-Score
-3.30 (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.

Broadwind Energy Inc has a M-score of -3.30 suggests that the company is not a manipulator.

BWEN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.75   Max: 13.07
Current: -3.3

-4.75
13.07

During the past 13 years, the highest Beneish M-Score of Broadwind Energy Inc was 13.07. The lowest was -4.75. And the median was -2.94.


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 Broadwind Energy Inc 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 * 1.3355+0.528 * 0.3938+0.404 * 0.8469+0.892 * 0.908+0.115 * 1.3371
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9516+4.679 * -0.1447-0.327 * 1.1129
=-3.30

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $11.9 Mil.
Revenue was 48.151 + 42.552 + 43.38 + 46.757 = $180.8 Mil.
Gross Profit was 4.704 + 5.331 + 4.142 + 3.962 = $18.1 Mil.
Total Current Assets was $58.2 Mil.
Total Assets was $117.7 Mil.
Property, Plant and Equipment(Net PPE) was $54.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.9 Mil.
Selling, General & Admin. Expense(SGA) was $15.8 Mil.
Total Current Liabilities was $43.3 Mil.
Long-Term Debt was $3.6 Mil.
Net Income was 0.298 + 0.872 + -0.474 + -0.377 = $0.3 Mil.
Non Operating Income was 0.022 + 0.01 + 0.005 + 0.012 = $0.0 Mil.
Cash Flow from Operations was -0.553 + 16.065 + -1.273 + 3.061 = $17.3 Mil.
Accounts Receivable was $9.8 Mil.
Revenue was 37.573 + 49.791 + 62.563 + 49.229 = $199.2 Mil.
Gross Profit was -6.209 + 2.831 + 8.499 + 2.745 = $7.9 Mil.
Total Current Assets was $52.6 Mil.
Total Assets was $109.9 Mil.
Property, Plant and Equipment(Net PPE) was $51.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.2 Mil.
Selling, General & Admin. Expense(SGA) was $18.3 Mil.
Total Current Liabilities was $36.8 Mil.
Long-Term Debt was $2.6 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)
=(11.865 / 180.84) / (9.784 / 199.156)
=0.06561048 / 0.04912732
=1.3355

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)
=(7.866 / 199.156) / (18.139 / 180.84)
=0.03949668 / 0.10030414
=0.3938

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 - (58.19 + 54.606) / 117.662) / (1 - (52.634 + 51.906) / 109.907)
=0.04135575 / 0.04883219
=0.8469

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
=180.84 / 199.156
=0.908

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))
=(9.179 / (9.179 + 51.906)) / (6.914 / (6.914 + 54.606))
=0.15026602 / 0.11238622
=1.3371

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)
=(15.786 / 180.84) / (18.27 / 199.156)
=0.08729263 / 0.09173713
=0.9516

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)
=((3.638 + 43.251) / 117.662) / ((2.6 + 36.755) / 109.907)
=0.39850589 / 0.35807546
=1.1129

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
=(0.319 - 0.049 - 17.3) / 117.662
=-0.1447

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.

Broadwind Energy Inc has a M-score of -3.30 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.

Broadwind Energy Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 11.35270.37180.70221.31960.87010.69830.91320.86890.6511.3355
GMI -1.50270.86072.38374.53150.36761.19190.56690.65622.20790.3938
AQI 4.17890.66110.60690.3040.88380.98490.87431.39460.69210.8469
SGI 7.40847.29170.85030.74081.35761.13371.02371.04690.88190.908
DEPI 1.85830.430.91931.06490.94380.82840.96891.12361.04831.3371
SGAI 0.61760.99540.91781.1410.70730.72510.96690.84441.09440.9515
LVGI 0.16670.76851.03030.97721.02790.83541.50370.94790.95911.1129
TATA -0.0187-0.0598-0.5198-0.3971-0.0675-0.113-0.2482-0.0845-0.1521-0.1447
M-score 13.072.07-4.75-2.70-2.94-2.99-4.14-2.92-3.10-3.30

Broadwind Energy Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.95460.8470.95260.97430.79770.66780.64410.96381.07951.3355
GMI 0.61260.72720.93231.15151.20481.99241.54862.73531.62870.3938
AQI 0.76711.39460.80120.82061.15810.69211.16071.10660.89790.8469
SGI 1.16971.0740.96980.88480.88240.85970.88560.82070.80780.908
DEPI 1.12281.12361.21191.22341.08351.04830.98720.98141.15981.3371
SGAI 0.87930.87420.90230.92330.97211.05711.01911.09141.10530.9516
LVGI 0.99740.94791.0230.98120.90140.95910.94881.09461.28481.1129
TATA -0.1332-0.0854-0.0632-0.04910.0564-0.1521-0.3245-0.338-0.3328-0.1447
M-score -3.26-2.89-2.93-2.78-2.29-3.21-4.06-3.34-3.94-3.30
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