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Ensco PLC (NYSE:ESV)
Beneish M-Score
-4.66 (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 -4.66 suggests that the company is not a manipulator.

ESV' s 10-Year Beneish M-Score Range
Min: -4.68   Max: 0.02
Current: -4.66

-4.68
0.02

During the past 13 years, the highest Beneish M-Score of Ensco PLC was 0.02. The lowest was -4.68. And the median was -2.52.


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 * 0.9555+0.528 * 0.9771+0.404 * 0.1865+0.892 * 1.0572+0.115 * 0.7608
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7967+4.679 * -0.3633-0.327 * 1.489
=-4.66

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $781 Mil.
Revenue was 1163.9 + 970.4 + 1261.2 + 1203 = $4,599 Mil.
Gross Profit was 645.6 + 553.5 + 729.8 + 627 = $2,556 Mil.
Total Current Assets was $3,054 Mil.
Total Assets was $16,346 Mil.
Property, Plant and Equipment(Net PPE) was $12,725 Mil.
Depreciation, Depletion and Amortization(DDA) was $535 Mil.
Selling, General & Admin. Expense(SGA) was $124 Mil.
Total Current Liabilities was $1,134 Mil.
Long-Term Debt was $5,919 Mil.
Net Income was 324.7 + -3451.8 + 429.4 + -1172.7 = $-3,870 Mil.
Non Operating Income was -22.6 + 0 + -3.5 + 2.1 = $-24 Mil.
Cash Flow from Operations was 467.7 + 472.6 + 596 + 556.4 = $2,093 Mil.
Accounts Receivable was $774 Mil.
Revenue was 1066.7 + 990.6 + 1162.2 + 1130.3 = $4,350 Mil.
Gross Profit was 546.5 + 584.8 + 627.9 + 603.1 = $2,362 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 $456 Mil.
Selling, General & Admin. Expense(SGA) was $147 Mil.
Total Current Liabilities was $953 Mil.
Long-Term Debt was $4,704 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)
=(781.4 / 4598.5) / (773.6 / 4349.8)
=0.16992498 / 0.17784726
=0.9555

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)
=(553.5 / 4349.8) / (645.6 / 4598.5)
=0.54308244 / 0.55581168
=0.9771

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 - (3053.8 + 12725.3) / 16346.2) / (1 - (1472.4 + 14418.3) / 19521.2)
=0.03469308 / 0.1859773
=0.1865

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
=4598.5 / 4349.8
=1.0572

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))
=(456.4 / (456.4 + 14418.3)) / (534.8 / (534.8 + 12725.3))
=0.03068297 / 0.04033152
=0.7608

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)
=(123.9 / 4598.5) / (147.1 / 4349.8)
=0.02694357 / 0.03381765
=0.7967

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)
=((5919.3 + 1133.6) / 16346.2) / ((4703.7 + 952.9) / 19521.2)
=0.43147031 / 0.28976702
=1.489

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
=(-3870.4 - -24 - 2092.7) / 16346.2
=-0.3633

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 -4.66 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.03930.73610.95841.09910.85210.74592.23950.65811.03030.9764
GMI 0.7890.82351.00330.98951.09791.12161.15530.91220.96151.0085
AQI 0.86940.85891.08390.98930.95580.87592.64710.93880.93560.1974
SGI 1.41431.71111.18011.1460.78910.88631.67111.53721.00531.0558
DEPI 0.95910.9791.06461.01191.14071.02761.58250.74281.22770.7803
SGAI 0.68360.81451.13040.7891.50741.51781.10230.61070.98070.851
LVGI 0.87360.818910.75290.91320.75964.15310.89860.94981.4699
TATA -0.0197-0.043-0.0580.0014-0.0707-0.0363-0.0085-0.0556-0.0223-0.3712
M-score -2.24-2.35-2.61-2.14-3.14-2.98-1.02-2.58-2.55-4.66

Ensco PLC Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.65810.83030.96440.8451.00480.97380.931.09751.01530.9555
GMI 0.91220.92810.95420.99120.97410.9740.97820.95560.9940.9771
AQI 0.93880.93740.94440.93320.93560.94671.02410.96440.19740.1865
SGI 1.53721.28151.13261.08541.03080.98190.98510.99861.01541.0572
DEPI 0.74280.80160.92460.95681.22771.3041.00790.95020.78030.7608
SGAI 0.61070.69510.85210.87590.95651.00880.99810.94810.88490.7967
LVGI 0.89860.89050.9060.94360.94980.95711.05661.19831.46991.489
TATA -0.0556-0.0419-0.0362-0.0375-0.0223-0.028-0.1231-0.1082-0.3712-0.3633
M-score -2.58-2.58-2.56-2.72-2.54-2.64-3.15-3.00-4.68-4.66
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