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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.
Denbury Resources Inc has a M-score of -2.80 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Denbury Resources Inc was -0.04. The lowest was -4.55. And the median was -2.58.
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 Denbury Resources 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 * 0.9454||+||0.528 * 0.9604||+||0.404 * 0.9311||+||0.892 * 1.0635||+||0.115 * 0.9421|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1692||+||4.679 * -0.0464||-||0.327 * 1.0911|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $353 Mil.|
Revenue was 672.12 + 641.744 + 599.122 + 684.835 = $2,598 Mil.
Gross Profit was 434.281 + 466.16 + 410.615 + 503.868 = $1,815 Mil.
Total Current Assets was $423 Mil.
Total Assets was $12,000 Mil.
Property, Plant and Equipment(Net PPE) was $10,071 Mil.
Depreciation, Depletion and Amortization(DDA) was $559 Mil.
Selling, General & Admin. Expense(SGA) was $205 Mil.
Total Current Liabilities was $736 Mil.
Long-Term Debt was $3,602 Mil.
Net Income was -55.2 + 58.31 + 89.992 + 102.054 = $195 Mil.
Non Operating Income was -288.679 + -76.669 + -0.1 + -81.92 = $-447 Mil.
Cash Flow from Operations was 329.847 + 214.858 + 348.986 + 305.465 = $1,199 Mil.
|Accounts Receivable was $351 Mil.
Revenue was 650.084 + 583.086 + 609.204 + 600.371 = $2,443 Mil.
Gross Profit was 367.835 + 438.822 + 417.247 + 415.146 = $1,639 Mil.
Total Current Assets was $484 Mil.
Total Assets was $11,509 Mil.
Property, Plant and Equipment(Net PPE) was $9,474 Mil.
Depreciation, Depletion and Amortization(DDA) was $494 Mil.
Selling, General & Admin. Expense(SGA) was $165 Mil.
Total Current Liabilities was $614 Mil.
Long-Term Debt was $3,199 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(353.284 / 2597.821)||/||(351.386 / 2442.745)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(466.16 / 2442.745)||/||(434.281 / 2597.821)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (422.973 + 10071.423) / 11999.677)||/||(1 - (484.058 + 9473.887) / 11508.51)|
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.
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))|
|=||(494.159 / (494.159 + 9473.887))||/||(559.432 / (559.432 + 10071.423))|
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)|
|=||(205.264 / 2597.821)||/||(165.08 / 2442.745)|
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)|
|=||((3602.156 + 736.028) / 11999.677)||/||((3198.911 + 614.352) / 11508.51)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(195.156 - -447.368||-||1199.156)||/||11999.677|
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.
Denbury Resources Inc has a M-score of -2.80 suggests that the company will not be a manipulator.
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
Denbury Resources Inc Annual Data
Denbury Resources Inc Quarterly Data