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Ensco PLC (NYSE:ESV)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

ESV' s 10-Year Beneish M-Score Range
Min: -3.81   Max: 0.02
Current: -2.99

-3.81
0.02

During the past 13 years, the highest Beneish M-Score of Ensco PLC was 0.02. The lowest was -3.81. And the median was -2.48.


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 * 0.9473+0.528 * 1.0336+0.404 * 0.9644+0.892 * 1.1569+0.115 * 0.7732
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8184+4.679 * -0.1167-0.327 * 1.1983
=-2.99

* 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 $838 Mil.
Revenue was 1261.2 + 1203 + 1187 + 1587 = $5,238 Mil.
Gross Profit was 729.8 + 627 + 582.6 + 725.8 = $2,665 Mil.
Total Current Assets was $3,030 Mil.
Total Assets was $19,773 Mil.
Property, Plant and Equipment(Net PPE) was $13,128 Mil.
Depreciation, Depletion and Amortization(DDA) was $629 Mil.
Selling, General & Admin. Expense(SGA) was $139 Mil.
Total Current Liabilities was $1,132 Mil.
Long-Term Debt was $5,904 Mil.
Net Income was 429.4 + -1172.7 + 292.5 + 361.4 = $-89 Mil.
Non Operating Income was -3.5 + 2.1 + 1.9 + 2 = $3 Mil.
Cash Flow from Operations was 596 + 572.7 + 416.6 + 630.9 = $2,216 Mil.
Accounts Receivable was $765 Mil.
Revenue was 1162.2 + 1130.3 + 1149.9 + 1085.5 = $4,528 Mil.
Gross Profit was 627.9 + 603.1 + 589.1 + 561 = $2,381 Mil.
Total Current Assets was $1,517 Mil.
Total Assets was $19,143 Mil.
Property, Plant and Equipment(Net PPE) was $13,997 Mil.
Depreciation, Depletion and Amortization(DDA) was $513 Mil.
Selling, General & Admin. Expense(SGA) was $147 Mil.
Total Current Liabilities was $941 Mil.
Long-Term Debt was $4,744 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)
=(838.3 / 5238.2) / (764.9 / 4527.9)
=0.16003589 / 0.16893041
=0.9473

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)
=(627 / 4527.9) / (729.8 / 5238.2)
=0.52587292 / 0.50880073
=1.0336

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 - (3030.4 + 13127.6) / 19772.5) / (1 - (1517.1 + 13997.4) / 19142.9)
=0.1828044 / 0.18954286
=0.9644

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
=5238.2 / 4527.9
=1.1569

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))
=(512.7 / (512.7 + 13997.4)) / (628.6 / (628.6 + 13127.6))
=0.03533401 / 0.04569576
=0.7732

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)
=(138.8 / 5238.2) / (146.6 / 4527.9)
=0.02649765 / 0.03237704
=0.8184

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)
=((5903.9 + 1131.5) / 19772.5) / ((4743.6 + 940.5) / 19142.9)
=0.35581742 / 0.29692993
=1.1983

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
=(-89.4 - 2.5 - 2216.2) / 19772.5
=-0.1167

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 -2.99 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 1.24331.03930.73610.95841.09910.85210.74592.23950.65810.9359
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 -2.64-2.24-2.35-2.61-2.14-3.14-2.98-1.02-2.58-2.53

Ensco PLC Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.53090.67990.65810.83030.96440.8450.91550.8360.80030.9473
GMI 1.03690.95830.91220.92810.95420.99121.04391.05541.05821.0336
AQI 0.93360.93750.93880.93740.94440.93320.93560.94671.02410.9644
SGI 2.27811.8731.53721.28151.13261.08541.16941.14371.14481.1569
DEPI 0.65220.84190.74280.80160.92460.95680.98240.98540.81730.7732
SGAI 0.56160.58310.61070.69510.85210.87590.84310.86610.85890.8184
LVGI 0.9450.9020.89860.89050.9060.94360.94980.95711.05661.1983
TATA -0.0302-0.0413-0.0556-0.0419-0.0362-0.0375-0.031-0.0358-0.1324-0.1167
M-score -1.87-2.15-2.58-2.58-2.56-2.72-2.51-2.63-3.13-2.99
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