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Ensco PLC (NYSE:ESV)
Beneish M-Score
-3.14 (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 -3.14 suggests that the company is not a manipulator.

ESV' s 10-Year Beneish M-Score Range
Min: -3.81   Max: 0.13
Current: -3.14

-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 -2.47.


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 * 0.8547+0.528 * 1.0384+0.404 * 1.0241+0.892 * 1.0941+0.115 * 0.8173
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8987+4.679 * -0.1324-0.327 * 1.0566
=-3.14

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $844 Mil.
Revenue was 1203 + 1187 + 1255.6 + 1266.2 = $4,912 Mil.
Gross Profit was 627 + 582.6 + 639.9 + 647 = $2,497 Mil.
Total Current Assets was $1,776 Mil.
Total Assets was $18,271 Mil.
Property, Plant and Equipment(Net PPE) was $12,881 Mil.
Depreciation, Depletion and Amortization(DDA) was $619 Mil.
Selling, General & Admin. Expense(SGA) was $147 Mil.
Total Current Liabilities was $1,090 Mil.
Long-Term Debt was $4,679 Mil.
Net Income was -1172.7 + 292.5 + 361.4 + 378.8 = $-140 Mil.
Non Operating Income was 2.1 + 1.9 + 2 + 34.3 = $40 Mil.
Cash Flow from Operations was 572.7 + 416.6 + 547.9 + 701.1 = $2,238 Mil.
Accounts Receivable was $902 Mil.
Revenue was 1130.3 + 1149.9 + 1085.5 + 1123.5 = $4,489 Mil.
Gross Profit was 603.1 + 589.1 + 561 + 616.2 = $2,369 Mil.
Total Current Assets was $1,784 Mil.
Total Assets was $18,807 Mil.
Property, Plant and Equipment(Net PPE) was $13,391 Mil.
Depreciation, Depletion and Amortization(DDA) was $521 Mil.
Selling, General & Admin. Expense(SGA) was $149 Mil.
Total Current Liabilities was $861 Mil.
Long-Term Debt was $4,759 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)
=(843.6 / 4911.8) / (902.1 / 4489.2)
=0.17174966 / 0.20094894
=0.8547

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)
=(582.6 / 4489.2) / (627 / 4911.8)
=0.52780005 / 0.50826581
=1.0384

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 - (1775.8 + 12881.2) / 18271.2) / (1 - (1783.5 + 13390.5) / 18806.6)
=0.19780857 / 0.19315559
=1.0241

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
=4911.8 / 4489.2
=1.0941

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))
=(521.4 / (521.4 + 13390.5)) / (619.1 / (619.1 + 12881.2))
=0.03747871 / 0.04585824
=0.8173

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)
=(146.9 / 4911.8) / (149.4 / 4489.2)
=0.02990757 / 0.03327987
=0.8987

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)
=((4679.1 + 1090) / 18271.2) / ((4758.7 + 861.3) / 18806.6)
=0.31574828 / 0.29883126
=1.0566

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
=(-140 - 40.3 - 2238.3) / 18271.2
=-0.1324

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 -3.14 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.29640.55040.69560.42210.83030.93020.81860.94450.88210.8547
GMI 1.07311.03690.95830.91220.92810.95421.00591.02361.03531.0384
AQI 3.8890.93360.93750.93880.93740.94440.93320.93560.94671.0241
SGI 2.17812.27811.8731.53721.28151.13261.11031.11661.09231.0941
DEPI 1.38360.65220.84190.74280.80160.92460.85880.98240.98540.8173
SGAI 0.80060.56160.58310.61070.69510.85210.85620.8830.90680.8987
LVGI 1.03570.9450.9020.89860.89050.9060.94360.94980.95711.0566
TATA -0.0206-0.0302-0.0413-0.0556-0.0419-0.0362-0.0418-0.031-0.0358-0.1324
M-score 0.02-1.85-2.14-2.79-2.58-2.59-2.74-2.55-2.65-3.14
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