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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 -9.49. And the median was -2.72.
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 * 1.1887||+||0.528 * 1.3004||+||0.404 * 0.2427||+||0.892 * 0.5448||+||0.115 * 0.6761|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.4959||+||4.679 * 0.1815||-||0.327 * 2.0073|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $96 Mil.|
Revenue was 194.844 + 269.617 + 303.6 + 376.694 = $1,145 Mil.
Gross Profit was 78.596 + 100.543 + 148.616 + 229.364 = $557 Mil.
Total Current Assets was $273 Mil.
Total Assets was $5,539 Mil.
Property, Plant and Equipment(Net PPE) was $5,102 Mil.
Depreciation, Depletion and Amortization(DDA) was $459 Mil.
Selling, General & Admin. Expense(SGA) was $146 Mil.
Total Current Liabilities was $324 Mil.
Long-Term Debt was $3,222 Mil.
Net Income was -185.193 + -885.077 + -2244.126 + -1148.499 = $-4,463 Mil.
Non Operating Income was -186.148 + -1318.76 + -2934.152 + -1757.377 = $-6,196 Mil.
Cash Flow from Operations was 2.029 + 164.907 + 272.676 + 288.957 = $729 Mil.
|Accounts Receivable was $148 Mil.
Revenue was 307.649 + 483.684 + 637.657 + 672.12 = $2,101 Mil.
Gross Profit was 153.933 + 274.903 + 415.731 + 485.131 = $1,330 Mil.
Total Current Assets was $769 Mil.
Total Assets was $12,468 Mil.
Property, Plant and Equipment(Net PPE) was $10,180 Mil.
Depreciation, Depletion and Amortization(DDA) was $602 Mil.
Selling, General & Admin. Expense(SGA) was $179 Mil.
Total Current Liabilities was $382 Mil.
Long-Term Debt was $3,596 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)|
|=||(95.934 / 1144.755)||/||(148.125 / 2101.11)|
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)|
|=||(1329.698 / 2101.11)||/||(557.119 / 1144.755)|
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 - (272.975 + 5101.797) / 5538.547)||/||(1 - (768.654 + 10180.074) / 12468.056)|
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))|
|=||(601.8 / (601.8 + 10180.074))||/||(459.068 / (459.068 + 5101.797))|
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)|
|=||(145.773 / 1144.755)||/||(178.861 / 2101.11)|
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)|
|=||((3222.497 + 324.402) / 5538.547)||/||((3596.085 + 381.674) / 12468.056)|
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|
|=||(-4462.895 - -6196.437||-||728.569)||/||5538.547|
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 -2.46 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