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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.
During the past 13 years, the highest Beneish M-Score of Denbury Resources Inc was 1.14. The lowest was -8.75. And the median was -2.88.
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 * 1.3299||+||0.528 * 1.0589||+||0.404 * 0.8687||+||0.892 * 0.7758||+||0.115 * 0.5143|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9798||+||4.679 * -0.073||-||0.327 * 1.2723|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $145.0 Mil.|
Revenue was 271.619 + 253.985 + 255.148 + 194.844 = $975.6 Mil.
Gross Profit was 148.026 + 132.15 + 141.059 + 78.596 = $499.8 Mil.
Total Current Assets was $181.1 Mil.
Total Assets was $4,274.6 Mil.
Property, Plant and Equipment(Net PPE) was $3,988.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $846.0 Mil.
Selling, General & Admin. Expense(SGA) was $123.5 Mil.
Total Current Liabilities was $433.5 Mil.
Long-Term Debt was $2,909.7 Mil.
Net Income was -385.726 + -24.59 + -380.668 + -185.193 = $-976.2 Mil.
Non Operating Income was -53.472 + -41.74 + -601.877 + -186.148 = $-883.2 Mil.
Cash Flow from Operations was 59.864 + 96.415 + 60.915 + 2.029 = $219.2 Mil.
|Accounts Receivable was $140.6 Mil.
Revenue was 269.617 + 303.6 + 376.694 + 307.649 = $1,257.6 Mil.
Gross Profit was 124.694 + 174.223 + 229.364 + 153.933 = $682.2 Mil.
Total Current Assets was $343.2 Mil.
Total Assets was $5,885.5 Mil.
Property, Plant and Equipment(Net PPE) was $5,375.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $531.7 Mil.
Selling, General & Admin. Expense(SGA) was $162.5 Mil.
Total Current Liabilities was $373.0 Mil.
Long-Term Debt was $3,245.1 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)|
|=||(145.02 / 975.596)||/||(140.559 / 1257.56)|
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)|
|=||(682.214 / 1257.56)||/||(499.831 / 975.596)|
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 - (181.126 + 3988.374) / 4274.578)||/||(1 - (343.169 + 5375.809) / 5885.533)|
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))|
|=||(531.66 / (531.66 + 5375.809))||/||(846.043 / (846.043 + 3988.374))|
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)|
|=||(123.514 / 975.596)||/||(162.495 / 1257.56)|
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)|
|=||((2909.732 + 433.496) / 4274.578)||/||((3245.114 + 373.015) / 5885.533)|
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|
|=||(-976.177 - -883.237||-||219.223)||/||4274.578|
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 -2.88 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