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GuruFocus has detected 6 Warning Signs with Entergy Corp $ETR.
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Entergy Corp (NYSE:ETR)
Beneish M-Score
-2.78 (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.

Entergy Corp has a M-score of -2.78 suggests that the company is not a manipulator.

ETR' s Beneish M-Score Range Over the Past 10 Years
Min: -2.94   Max: -2.21
Current: -2.78

-2.94
-2.21

During the past 13 years, the highest Beneish M-Score of Entergy Corp was -2.21. The lowest was -2.94. And the median was -2.82.


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 Entergy Corp 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 * 1.2006+0.528 * 0.9187+0.404 * 1.0913+0.892 * 0.942+0.115 * 1.001
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2402+4.679 * -0.0784-0.327 * 1.0604
=-2.78

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $643 Mil.
Revenue was 2648.527 + 3124.703 + 2462.562 + 2609.852 = $10,846 Mil.
Gross Profit was 1792.597 + 2231.931 + 1791.38 + 1791.332 = $7,607 Mil.
Total Current Assets was $3,684 Mil.
Total Assets was $45,904 Mil.
Property, Plant and Equipment(Net PPE) was $28,155 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,123 Mil.
Selling, General & Admin. Expense(SGA) was $327 Mil.
Total Current Liabilities was $3,200 Mil.
Long-Term Debt was $14,492 Mil.
Net Income was -1765.538 + 393.204 + 572.59 + 235.242 = $-565 Mil.
Non Operating Income was 3.406 + 8.711 + 5.483 + 18.027 = $36 Mil.
Cash Flow from Operations was 746.304 + 1000.315 + 719.259 + 532.821 = $2,999 Mil.
Accounts Receivable was $569 Mil.
Revenue was 2508.523 + 3371.406 + 2713.231 + 2920.09 = $11,513 Mil.
Gross Profit was 1649.147 + 2113.596 + 1773.471 + 1882.744 = $7,419 Mil.
Total Current Assets was $4,067 Mil.
Total Assets was $44,648 Mil.
Property, Plant and Equipment(Net PPE) was $28,044 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,117 Mil.
Selling, General & Admin. Expense(SGA) was $280 Mil.
Total Current Liabilities was $3,090 Mil.
Long-Term Debt was $13,139 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)
=(643.071 / 10845.644) / (568.596 / 11513.25)
=0.05929302 / 0.04938623
=1.2006

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)
=(7418.958 / 11513.25) / (7607.24 / 10845.644)
=0.64438434 / 0.70140971
=0.9187

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 - (3684.268 + 28155.048) / 45904.434) / (1 - (4067.412 + 28044.36) / 44647.681)
=0.30639999 / 0.28077402
=1.0913

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
=10845.644 / 11513.25
=0.942

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))
=(2117.236 / (2117.236 + 28044.36)) / (2123.291 / (2123.291 + 28155.048))
=0.07019642 / 0.07012574
=1.001

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)
=(327.425 / 10845.644) / (280.272 / 11513.25)
=0.03018954 / 0.02434343
=1.2402

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)
=((14492.237 + 3200.096) / 45904.434) / ((13138.557 + 3089.958) / 44647.681)
=0.38541665 / 0.36347946
=1.0604

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
=(-564.502 - 35.627 - 2998.699) / 45904.434
=-0.0784

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.

Entergy Corp has a M-score of -2.78 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 local exchange's currency.

Entergy Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.96230.68991.01030.75041.41640.82410.80411.09951.2006
GMI 0.87730.82111.03050.9970.93811.04831.0190.95380.9187
AQI 0.99271.04071.05881.06460.98280.9481.07410.99571.0913
SGI 1.05050.82071.0690.97750.91741.10571.09690.92140.942
DEPI 0.97760.99540.87991.03541.05620.90350.97610.97581.001
SGAI 01.28060.9950.92091.05661.18511.02661.11571.2402
LVGI 1.06540.88660.98741.01081.00661.00590.93711.03721.0604
TATA -0.0437-0.043-0.0698-0.0439-0.0489-0.0574-0.0636-0.0762-0.0782
M-score -2.59-3.22-2.70-2.90-2.44-2.86-2.82-2.88-2.78

Entergy Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.73970.80410.6950.71391.0951.09950.93660.90931.02941.2006
GMI 1.03091.0191.01380.98830.96430.95380.94330.93750.91470.9187
AQI 0.95481.07411.08921.07841.06730.99570.97280.97951.0271.0913
SGI 1.10961.09691.0180.97330.9580.92140.91780.91860.90450.942
DEPI 0.94410.97610.99031.00270.97760.97581.02631.05061.09261.001
SGAI 1.00271.02661.09261.1141.10171.11571.09851.12181.20221.2402
LVGI 0.99560.93710.94340.95571.01441.03721.08891.07360.98941.0604
TATA -0.0654-0.0636-0.0626-0.0628-0.0778-0.0764-0.0742-0.0652-0.0392-0.0784
M-score -2.94-2.82-2.99-3.04-2.81-2.88-3.04-3.02-2.78-2.78
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