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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 -2.84.
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 * 1.1982||+||0.528 * 1.2946||+||0.404 * 0.2742||+||0.892 * 0.5164||+||0.115 * 0.602|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.7679||+||4.679 * 0.1397||-||0.327 * 1.8797|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $141 Mil.|
Revenue was 269.617 + 303.6 + 376.694 + 307.649 = $1,258 Mil.
Gross Profit was 124.694 + 148.616 + 229.364 + 127.254 = $630 Mil.
Total Current Assets was $345 Mil.
Total Assets was $5,920 Mil.
Property, Plant and Equipment(Net PPE) was $5,376 Mil.
Depreciation, Depletion and Amortization(DDA) was $532 Mil.
Selling, General & Admin. Expense(SGA) was $145 Mil.
Total Current Liabilities was $373 Mil.
Long-Term Debt was $3,278 Mil.
Net Income was -885.077 + -2244.126 + -1148.499 + -107.746 = $-4,385 Mil.
Non Operating Income was -1318.76 + -2934.152 + -1757.377 + -66.331 = $-6,077 Mil.
Cash Flow from Operations was 164.907 + 272.676 + 288.957 + 137.764 = $864 Mil.
|Accounts Receivable was $227 Mil.
Revenue was 483.684 + 637.657 + 672.12 + 641.744 = $2,435 Mil.
Gross Profit was 274.903 + 415.731 + 485.131 + 403.429 = $1,579 Mil.
Total Current Assets was $813 Mil.
Total Assets was $12,728 Mil.
Property, Plant and Equipment(Net PPE) was $10,352 Mil.
Depreciation, Depletion and Amortization(DDA) was $593 Mil.
Selling, General & Admin. Expense(SGA) was $158 Mil.
Total Current Liabilities was $640 Mil.
Long-Term Debt was $3,536 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)|
|=||(140.559 / 1257.56)||/||(227.168 / 2435.205)|
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)|
|=||(148.616 / 2435.205)||/||(124.694 / 1257.56)|
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 - (344.708 + 5375.809) / 5919.824)||/||(1 - (812.68 + 10352.244) / 12727.802)|
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))|
|=||(592.972 / (592.972 + 10352.244))||/||(531.66 / (531.66 + 5375.809))|
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)|
|=||(144.564 / 1257.56)||/||(158.343 / 2435.205)|
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)|
|=||((3277.866 + 373.015) / 5919.824)||/||((3535.9 + 640.125) / 12727.802)|
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|
|=||(-4385.448 - -6076.62||-||864.304)||/||5919.824|
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 -2.68 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