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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 1.20. The lowest was -4.16. And the median was -2.62.
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 * 0.9396||+||0.528 * 0.8756||+||0.404 * 0.9563||+||0.892 * 1.0093||+||0.115 * 0.8854|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.4468||+||4.679 * -0.0625||-||0.327 * 0.9317|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $347 Mil.|
Revenue was 637.657 + 672.12 + 641.744 + 599.122 = $2,551 Mil.
Gross Profit was 415.731 + 503.28 + 466.16 + 590.353 = $1,976 Mil.
Total Current Assets was $416 Mil.
Total Assets was $12,140 Mil.
Property, Plant and Equipment(Net PPE) was $10,197 Mil.
Depreciation, Depletion and Amortization(DDA) was $580 Mil.
Selling, General & Admin. Expense(SGA) was $258 Mil.
Total Current Liabilities was $559 Mil.
Long-Term Debt was $3,185 Mil.
Net Income was 268.748 + -55.2 + 58.31 + 89.992 = $362 Mil.
Non Operating Income was 252.265 + -288.679 + -76.669 + -0.1 = $-113 Mil.
Cash Flow from Operations was 340.392 + 329.847 + 214.858 + 348.986 = $1,234 Mil.
|Accounts Receivable was $366 Mil.
Revenue was 684.835 + 650.084 + 583.086 + 609.204 = $2,527 Mil.
Gross Profit was 437.35 + 367.835 + 438.822 + 469.805 = $1,714 Mil.
Total Current Assets was $440 Mil.
Total Assets was $11,610 Mil.
Property, Plant and Equipment(Net PPE) was $9,643 Mil.
Depreciation, Depletion and Amortization(DDA) was $483 Mil.
Selling, General & Admin. Expense(SGA) was $177 Mil.
Total Current Liabilities was $604 Mil.
Long-Term Debt was $3,239 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)|
|=||(346.868 / 2550.643)||/||(365.776 / 2527.209)|
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)|
|=||(503.28 / 2527.209)||/||(415.731 / 2550.643)|
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 - (416.486 + 10196.682) / 12140.053)||/||(1 - (439.794 + 9642.947) / 11609.645)|
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))|
|=||(482.819 / (482.819 + 9642.947))||/||(580.397 / (580.397 + 10196.682))|
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)|
|=||(258.079 / 2550.643)||/||(176.735 / 2527.209)|
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)|
|=||((3184.913 + 558.851) / 12140.053)||/||((3238.969 + 603.748) / 11609.645)|
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|
|=||(361.85 - -113.183||-||1234.083)||/||12140.053|
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 -2.97 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