Switch to:
DryShips Inc (NAS:DRYS)
Beneish M-Score
-0.86 (As of Today)

Warning Sign:

Beneish M-Score -0.86 higher than -2.22, which implies that it might have manipulated its financial results.

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.

DryShips Inc has a M-score of -0.86 signals that the company is a manipulator.

DRYS' s 10-Year Beneish M-Score Range
Min: -5.69   Max: 2.34
Current: -0.86

-5.69
2.34

During the past 13 years, the highest Beneish M-Score of DryShips Inc was 2.34. The lowest was -5.69. And the median was -2.03.


Definition

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 DryShips 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 * 0.1135+0.528 * 0.9371+0.404 * 9.7269+0.892 * 1.1505+0.115 * 0.179
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7449+4.679 * -0.2623-0.327 * 0.7241
=-0.86

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $46 Mil.
Revenue was 403.182 + 492.111 + 598.411 + 601.954 = $2,096 Mil.
Gross Profit was 246.433 + 282.882 + 344.061 + 346.939 = $1,220 Mil.
Total Current Assets was $676 Mil.
Total Assets was $2,616 Mil.
Property, Plant and Equipment(Net PPE) was $1,416 Mil.
Depreciation, Depletion and Amortization(DDA) was $439 Mil.
Selling, General & Admin. Expense(SGA) was $177 Mil.
Total Current Liabilities was $1,167 Mil.
Long-Term Debt was $0 Mil.
Net Income was -1440.323 + -59.157 + -23.997 + 16.67 = $-1,507 Mil.
Non Operating Income was -1363.677 + -18.655 + 111.469 + -36.859 = $-1,308 Mil.
Cash Flow from Operations was 177.86 + 32.048 + 208.662 + 68.57 = $487 Mil.
Accounts Receivable was $351 Mil.
Revenue was 527.673 + 457.486 + 431.352 + 404.941 = $1,821 Mil.
Gross Profit was 284.334 + 248.765 + 236.034 + 224.808 = $994 Mil.
Total Current Assets was $1,163 Mil.
Total Assets was $10,621 Mil.
Property, Plant and Equipment(Net PPE) was $9,239 Mil.
Depreciation, Depletion and Amortization(DDA) was $409 Mil.
Selling, General & Admin. Expense(SGA) was $207 Mil.
Total Current Liabilities was $2,167 Mil.
Long-Term Debt was $4,377 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(45.863 / 2095.658) / (351.185 / 1821.452)
=0.02188477 / 0.19280497
=0.1135

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(282.882 / 1821.452) / (246.433 / 2095.658)
=0.54568608 / 0.58230637
=0.9371

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (675.714 + 1416.225) / 2615.936) / (1 - (1163.156 + 9239.136) / 10621.015)
=0.20030956 / 0.02059342
=9.7269

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2095.658 / 1821.452
=1.1505

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))
=(408.889 / (408.889 + 9239.136)) / (439.393 / (439.393 + 1416.225))
=0.04238059 / 0.23679065
=0.179

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)
=(176.988 / 2095.658) / (206.508 / 1821.452)
=0.08445462 / 0.11337548
=0.7449

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)
=((0 + 1167.156) / 2615.936) / ((4376.552 + 2167.418) / 10621.015)
=0.44617147 / 0.61613415
=0.7241

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-1506.807 - -1307.722 - 487.14) / 2615.936
=-0.2623

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.

DryShips Inc has a M-score of -0.86 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

DryShips Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.70510.53262.56221.47631.67610.36044.43051.11331.49250.858
GMI 0.93781.07170.88621.051.10940.96281.1761.4480.83940.9322
AQI 0.08750.86437.12470.06640.791710.11350.5430.56910.6020.634
SGI 3.60731.08532.3451.85510.75861.04871.25351.12291.23291.4648
DEPI 1.88770.89691.19141.11170.90721.16181.01570.83821.06360.826
SGAI 5.25080.60252.667.87361.85170.23761.04481.45930.96410.594
LVGI 0.59351.00950.89561.24530.72640.84231.26841.03051.09750.9592
TATA -0.0578-0.03670.033-0.1406-0.0578-0.0256-0.0499-0.0484-0.0474-0.0496
M-score -1.59-2.972.50-3.54-2.440.720.48-2.54-2.30-2.55

DryShips Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.42751.52861.50271.49251.34541.05481.1960.8581.11060.1135
GMI 1.43761.34941.13460.83940.78710.78550.83420.93220.95110.9371
AQI 0.6020.60390.32980.6020.55920.66060.79010.6340.51379.7269
SGI 1.14731.04261.07021.23291.27091.42051.50241.46481.36221.1505
DEPI 0.92530.97951.05591.06361.0270.97580.88490.8260.81140.179
SGAI 1.26041.72381.56970.96411.0040.63580.55460.59130.58310.7449
LVGI 1.02921.04281.09131.09751.12591.12961.04220.95920.96250.7241
TATA -0.0678-0.0468-0.0484-0.0474-0.0251-0.046-0.0382-0.0515-0.0551-0.2623
M-score -2.27-2.29-2.50-2.30-2.37-2.50-2.15-2.56-2.47-0.86
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK