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DryShips Inc (NAS:DRYS)
Beneish M-Score
-2.20 (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 -2.20 signals that the company is a manipulator.

DRYS' s 10-Year Beneish M-Score Range
Min: -6.32   Max: 2.48
Current: -2.2

-6.32
2.48

During the past 13 years, the highest Beneish M-Score of DryShips Inc was 2.48. The lowest was -6.32. And the median was -2.07.


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 * 1.196+0.528 * 0.8342+0.404 * 0.7901+0.892 * 1.5024+0.115 * 0.9487
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5688+4.679 * -0.0484-0.327 * 1.0422
=-2.20

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $457 Mil.
Revenue was 601.954 + 527.673 + 457.486 + 431.352 = $2,018 Mil.
Gross Profit was 346.939 + 284.334 + 248.765 + 236.034 = $1,116 Mil.
Total Current Assets was $1,226 Mil.
Total Assets was $10,506 Mil.
Property, Plant and Equipment(Net PPE) was $9,145 Mil.
Depreciation, Depletion and Amortization(DDA) was $691 Mil.
Selling, General & Admin. Expense(SGA) was $197 Mil.
Total Current Liabilities was $2,063 Mil.
Long-Term Debt was $4,357 Mil.
Net Income was 16.67 + -5.634 + -34.551 + -24.369 = $-48 Mil.
Non Operating Income was -110.065 + 46.666 + -56.531 + 121.364 = $1 Mil.
Cash Flow from Operations was 68.57 + 162.459 + 35.417 + 192.813 = $459 Mil.
Accounts Receivable was $254 Mil.
Revenue was 404.941 + 336.008 + 319.713 + 282.866 = $1,344 Mil.
Gross Profit was 224.808 + 168.849 + 149.347 + 76.734 = $620 Mil.
Total Current Assets was $1,069 Mil.
Total Assets was $9,577 Mil.
Property, Plant and Equipment(Net PPE) was $8,352 Mil.
Depreciation, Depletion and Amortization(DDA) was $596 Mil.
Selling, General & Admin. Expense(SGA) was $231 Mil.
Total Current Liabilities was $1,463 Mil.
Long-Term Debt was $4,153 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)
=(456.884 / 2018.465) / (254.267 / 1343.528)
=0.2263522 / 0.18925322
=1.196

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)
=(284.334 / 1343.528) / (346.939 / 2018.465)
=0.46127658 / 0.55293106
=0.8342

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 - (1226.158 + 9144.549) / 10506.04) / (1 - (1069.08 + 8352.117) / 9577.349)
=0.01288145 / 0.0163043
=0.7901

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
=2018.465 / 1343.528
=1.5024

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))
=(596.324 / (596.324 + 8352.117)) / (690.91 / (690.91 + 9144.549))
=0.06663999 / 0.07024685
=0.9487

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)
=(197.08 / 2018.465) / (230.643 / 1343.528)
=0.09763855 / 0.17166966
=0.5688

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)
=((4356.628 + 2063.197) / 10506.04) / ((4152.708 + 1462.931) / 9577.349)
=0.6110604 / 0.58634587
=1.0422

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
=(-47.884 - 1.434 - 459.259) / 10506.04
=-0.0484

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 -2.20 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

Oct04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.70510.53262.56221.47631.67610.36044.43051.11331.4925
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 -1.59-2.972.50-3.54-2.430.720.52-2.52-2.31

DryShips Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.22941.41821.11331.42751.52861.50271.49251.34541.05481.196
GMI 1.19531.26211.4481.43761.34941.13460.83940.78710.78550.8342
AQI 0.9350.92280.54040.6020.60390.32980.6020.55920.66060.7901
SGI 1.40911.30061.12291.14731.04261.07021.23291.27091.42051.5024
DEPI 0.80810.75430.82090.87440.9060.96951.07151.06181.0340.9487
SGAI 0.9280.95841.27581.41251.57921.58821.02650.75660.67050.5688
LVGI 1.05891.01851.03251.02921.04281.09131.09751.12591.12961.0422
TATA -0.0447-0.0446-0.0484-0.0657-0.0451-0.0411-0.0578-0.037-0.0631-0.0484
M-score -2.07-1.96-2.52-2.29-2.27-2.48-2.36-2.38-2.58-2.20
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