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DryShips, Inc. (NAS:DRYS)
Beneish M-Score
-2.45 (As of Today)

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 -2.45 suggests that the company is not a manipulator.

DRYS' s 10-Year Beneish M-Score Range
Min: -3.37   Max: 1.27
Current: -2.45

-3.37
1.27

During the past 13 years, the highest Beneish M-Score of DryShips, Inc. was 1.27. The lowest was -3.37. And the median was -2.39.


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 * 1.3577+0.528 * 0.8394+0.404 * 0.602+0.892 * 1.2329+0.115 * 1.0636
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.059+4.679 * -0.0474-0.327 * 1.0975
=-2.45

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $361 Mil.
Revenue was 431.352 + 404.941 + 336.008 + 319.713 = $1,492 Mil.
Gross Profit was 236.034 + 224.808 + 168.849 + 149.347 = $779 Mil.
Total Current Assets was $1,184 Mil.
Total Assets was $10,124 Mil.
Property, Plant and Equipment(Net PPE) was $8,756 Mil.
Depreciation, Depletion and Amortization(DDA) was $357 Mil.
Selling, General & Admin. Expense(SGA) was $223 Mil.
Total Current Liabilities was $2,172 Mil.
Long-Term Debt was $3,908 Mil.
Net Income was -24.369 + -63.879 + -18.21 + -116.635 = $-223 Mil.
Non Operating Income was -5.95 + -9.599 + 25.093 + 1.074 = $11 Mil.
Cash Flow from Operations was 192.813 + 48.852 + -101.998 + 106.313 = $246 Mil.
Accounts Receivable was $216 Mil.
Revenue was 282.866 + 343.639 + 336.139 + 247.496 = $1,210 Mil.
Gross Profit was 76.734 + 154.708 + 163.261 + 135.703 = $530 Mil.
Total Current Assets was $904 Mil.
Total Assets was $8,878 Mil.
Property, Plant and Equipment(Net PPE) was $7,708 Mil.
Depreciation, Depletion and Amortization(DDA) was $335 Mil.
Selling, General & Admin. Expense(SGA) was $170 Mil.
Total Current Liabilities was $1,574 Mil.
Long-Term Debt was $3,285 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)
=(361.012 / 1492.014) / (215.671 / 1210.14)
=0.24196288 / 0.17821988
=1.3577

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)
=(224.808 / 1210.14) / (236.034 / 1492.014)
=0.43830135 / 0.52213853
=0.8394

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 - (1184.199 + 8756.326) / 10123.692) / (1 - (903.529 + 7708.107) / 8878.491)
=0.01809291 / 0.03005635
=0.602

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
=1492.014 / 1210.14
=1.2329

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))
=(335.458 / (335.458 + 7708.107)) / (357.372 / (357.372 + 8756.326))
=0.04170514 / 0.03921262
=1.0636

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)
=(222.6 / 1492.014) / (170.491 / 1210.14)
=0.14919431 / 0.14088535
=1.059

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)
=((3907.835 + 2171.714) / 10123.692) / ((3284.63 + 1573.529) / 8878.491)
=0.60052686 / 0.54718296
=1.0975

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
=(-223.093 - 10.618 - 245.98) / 10123.692
=-0.0474

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 -2.45 suggests that the company will not 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

Oct04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.02541.09291.24861.97451.77190.46672.87211.15621.3577
GMI 0.93781.07170.88621.051.10940.96281.1761.4480.8394
AQI 0.08750.86437.12470.06640.790610.12730.57180.54040.602
SGI 3.60731.08532.3451.85510.75861.04871.25351.12291.2329
DEPI 1.88770.89691.19141.11170.90871.15991.01570.83821.0636
SGAI 5.25080.60252.667.87361.85170.24111.11011.28551.0148
LVGI 0.59351.00950.89561.24530.72540.84351.26591.03251.0975
TATA -0.0578-0.03670.033-0.1406-0.0568-0.0255-0.0417-0.0484-0.0474
M-score -2.22-2.451.29-3.08-2.340.82-0.91-2.48-2.44

DryShips, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.5242.87211.80721.37471.31231.15621.14741.20111.40291.3577
GMI 1.1321.1761.20371.19531.26211.4481.43761.34941.13460.8394
AQI 3.56470.57181.04160.9350.92280.54040.6020.60390.32980.602
SGI 1.14871.25351.28041.40911.30061.12291.14731.04261.07021.2329
DEPI 1.51791.01570.89580.79720.71850.83820.84960.8520.90221.0636
SGAI 0.79421.07191.11930.9280.95841.27581.19261.58991.59961.059
LVGI 1.12621.26591.28811.05891.01851.03251.02921.04281.09131.0975
TATA -0.0416-0.0477-0.0436-0.0447-0.0446-0.0484-0.0681-0.0475-0.0434-0.0474
M-score -0.90-0.93-1.69-1.93-2.06-2.48-2.52-2.59-2.59-2.45
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