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Ensco PLC (NYSE:ESV)
Beneish M-Score
-2.64 (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.

Ensco PLC has a M-score of -2.64 suggests that the company is not a manipulator.

ESV' s 10-Year Beneish M-Score Range
Min: -3.81   Max: 0.13
Current: -2.64

-3.81
0.13

During the past 13 years, the highest Beneish M-Score of Ensco PLC was 0.13. The lowest was -3.81. And the median was -2.46.


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 Ensco PLC 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 * 0.8611+0.528 * 1.0443+0.404 * 0.9467+0.892 * 1.1189+0.115 * 0.9854
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8853+4.679 * -0.0358-0.327 * 0.9571
=-2.64

* 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 $780 Mil.
Revenue was 1187 + 1255.6 + 1266.2 + 1248.1 = $4,957 Mil.
Gross Profit was 582.6 + 639.9 + 647 + 641.3 = $2,511 Mil.
Total Current Assets was $1,472 Mil.
Total Assets was $19,521 Mil.
Property, Plant and Equipment(Net PPE) was $14,418 Mil.
Depreciation, Depletion and Amortization(DDA) was $610 Mil.
Selling, General & Admin. Expense(SGA) was $147 Mil.
Total Current Liabilities was $953 Mil.
Long-Term Debt was $4,704 Mil.
Net Income was 292.5 + 361.4 + 378.8 + 360.9 = $1,394 Mil.
Non Operating Income was 1.9 + 2 + 34.3 + -0.3 = $38 Mil.
Cash Flow from Operations was 416.6 + 547.9 + 648.2 + 442.1 = $2,055 Mil.
Accounts Receivable was $809 Mil.
Revenue was 1149.9 + 1085.5 + 1123.5 + 1071.1 = $4,430 Mil.
Gross Profit was 589.1 + 561 + 616.2 + 577.1 = $2,343 Mil.
Total Current Assets was $1,785 Mil.
Total Assets was $18,593 Mil.
Property, Plant and Equipment(Net PPE) was $13,155 Mil.
Depreciation, Depletion and Amortization(DDA) was $548 Mil.
Selling, General & Admin. Expense(SGA) was $149 Mil.
Total Current Liabilities was $845 Mil.
Long-Term Debt was $4,783 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)
=(779.6 / 4956.9) / (809.1 / 4430)
=0.15727572 / 0.18264108
=0.8611

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)
=(639.9 / 4430) / (582.6 / 4956.9)
=0.5289842 / 0.50652626
=1.0443

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 - (1472.4 + 14418.3) / 19521.2) / (1 - (1784.9 + 13155.2) / 18592.5)
=0.1859773 / 0.1964448
=0.9467

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
=4956.9 / 4430
=1.1189

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))
=(548.3 / (548.3 + 13155.2)) / (610.2 / (610.2 + 14418.3))
=0.04001168 / 0.04060285
=0.9854

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)
=(147.1 / 4956.9) / (148.5 / 4430)
=0.02967581 / 0.03352144
=0.8853

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)
=((4703.7 + 952.9) / 19521.2) / ((4783.3 + 845.4) / 18592.5)
=0.28976702 / 0.30274035
=0.9571

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
=(1393.6 - 37.9 - 2054.8) / 19521.2
=-0.0358

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.

Ensco PLC has a M-score of -2.64 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.

Ensco PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.24331.03930.73610.95841.09910.85210.74593.48730.42210.9219
GMI 0.97910.7890.82351.00330.98951.09791.12161.15530.91221.0328
AQI 0.90030.86940.85891.08390.98930.95580.87592.64710.93880.9356
SGI 0.98521.41431.71111.18011.1460.78910.88631.67111.53721.144
DEPI 0.98630.95910.9791.06461.01191.14071.02761.58250.74280.9824
SGAI 1.52720.68360.81451.13040.7891.50741.51781.10230.61070.8618
LVGI 0.96540.87360.818910.75290.91320.75964.15310.89860.9498
TATA -0.0512-0.0197-0.043-0.0580.0014-0.0707-0.0363-0.0085-0.0556-0.031
M-score -2.64-2.24-2.35-2.61-2.14-3.14-2.980.13-2.79-2.54

Ensco PLC Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 3.48731.29640.55040.69560.42210.83030.90640.79830.92190.8611
GMI 1.15531.07311.03690.95830.91220.92810.96371.01531.03281.0443
AQI 2.64713.8890.93360.93750.93880.93740.94440.93320.93560.9467
SGI 1.67112.17812.27811.8731.53721.28151.16231.13861.1441.1189
DEPI 1.58251.38360.65220.84190.74280.80160.85830.85880.98240.9854
SGAI 1.10230.80060.56160.58310.61070.69510.83040.8350.86180.8853
LVGI 4.15311.03570.9450.9020.89860.89050.9060.94360.94980.9571
TATA -0.0085-0.0206-0.0302-0.0413-0.0556-0.0419-0.039-0.0418-0.031-0.0358
M-score 0.130.02-1.85-2.14-2.79-2.58-2.60-2.73-2.54-2.64
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