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DryShips Inc (NAS:DRYS)
Beneish M-Score
-2.42 (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 -2.42 suggests that the company is not a manipulator.

DRYS' s 10-Year Beneish M-Score Range
Min: -5.97   Max: 1.53
Current: -2.42

-5.97
1.53

During the past 13 years, the highest Beneish M-Score of DryShips Inc was 1.53. The lowest was -5.97. And the median was -2.16.


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 * 1.2503+0.528 * 0.7871+0.404 * 0.5592+0.892 * 1.2709+0.115 * 1.0927
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7829+4.679 * -0.0271-0.327 * 1.1259
=-2.42

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $406 Mil.
Revenue was 457.486 + 431.352 + 404.941 + 336.008 = $1,630 Mil.
Gross Profit was 248.765 + 236.034 + 224.808 + 168.849 = $878 Mil.
Total Current Assets was $1,410 Mil.
Total Assets was $10,713 Mil.
Property, Plant and Equipment(Net PPE) was $9,087 Mil.
Depreciation, Depletion and Amortization(DDA) was $357 Mil.
Selling, General & Admin. Expense(SGA) was $204 Mil.
Total Current Liabilities was $2,359 Mil.
Long-Term Debt was $4,278 Mil.
Net Income was -34.551 + -24.369 + -63.879 + -18.21 = $-141 Mil.
Non Operating Income was -56.531 + -5.95 + -9.599 + 46.621 = $-25 Mil.
Cash Flow from Operations was 35.417 + 192.813 + 48.852 + -101.998 = $175 Mil.
Accounts Receivable was $256 Mil.
Revenue was 319.713 + 282.866 + 343.639 + 336.139 = $1,282 Mil.
Gross Profit was 149.347 + 76.734 + 154.708 + 163.261 = $544 Mil.
Total Current Assets was $937 Mil.
Total Assets was $9,041 Mil.
Property, Plant and Equipment(Net PPE) was $7,777 Mil.
Depreciation, Depletion and Amortization(DDA) was $335 Mil.
Selling, General & Admin. Expense(SGA) was $205 Mil.
Total Current Liabilities was $1,719 Mil.
Long-Term Debt was $3,255 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)
=(406.069 / 1629.787) / (255.533 / 1282.357)
=0.24915464 / 0.19926822
=1.2503

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)
=(236.034 / 1282.357) / (248.765 / 1629.787)
=0.42425783 / 0.5390005
=0.7871

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 - (1410.175 + 9086.874) / 10713.415) / (1 - (937.384 + 7777.389) / 9041.311)
=0.0201958 / 0.03611622
=0.5592

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
=1629.787 / 1282.357
=1.2709

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 + 7777.389)) / (357.372 / (357.372 + 9086.874))
=0.04134899 / 0.03784018
=1.0927

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)
=(203.594 / 1629.787) / (204.614 / 1282.357)
=0.12492062 / 0.15956087
=0.7829

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)
=((4277.545 + 2358.514) / 10713.415) / ((3254.978 + 1719.064) / 9041.311)
=0.61941584 / 0.5501461
=1.1259

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
=(-141.009 - -25.459 - 175.084) / 10713.415
=-0.0271

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 -2.42 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 2.87211.80721.37471.31231.15621.14741.20111.40291.35771.2503
GMI 1.1761.20371.19531.26211.4481.43761.34941.13460.83940.7871
AQI 0.57181.04160.9350.92280.54040.6020.60390.32980.6020.5592
SGI 1.25351.28041.40911.30061.12291.14731.04261.07021.23291.2709
DEPI 1.01570.89580.79720.71850.83820.84960.8520.90221.06361.0927
SGAI 1.07191.11930.9280.95841.27581.41251.58991.59961.0590.7829
LVGI 1.26591.28811.05891.01851.03251.02921.04281.09131.09751.1259
TATA -0.0477-0.0436-0.0447-0.0446-0.0484-0.0657-0.0475-0.0434-0.0474-0.0271
M-score -0.93-1.69-1.93-2.06-2.48-2.55-2.59-2.59-2.45-2.42
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