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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.
During the past 13 years, the highest Beneish M-Score of Statoil ASA was 0.64. The lowest was -3.53. And the median was -2.75.
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 Statoil ASA 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 * 0.9412||+||0.528 * 1.1728||+||0.404 * 1.0841||+||0.892 * 0.7312||+||0.115 * 1.3923|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3148||+||4.679 * -0.0998||-||0.327 * 0.9856|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was €6,167 Mil.|
Revenue was 9083.15373563 + 12019.645644 + 11765.2980487 + 15687.5398735 = €48,556 Mil.
Gross Profit was 3320.76149425 + 4473.51510144 + 4005.87899849 + 6864.00695001 = €18,664 Mil.
Total Current Assets was €24,874 Mil.
Total Assets was €101,295 Mil.
Property, Plant and Equipment(Net PPE) was €57,989 Mil.
Depreciation, Depletion and Amortization(DDA) was €10,193 Mil.
Selling, General & Admin. Expense(SGA) was €829 Mil.
Total Current Liabilities was €13,918 Mil.
Long-Term Debt was €27,128 Mil.
Net Income was 545.079022989 + -1033.69136142 + -294.39543794 + 1132.67397309 = €350 Mil.
Non Operating Income was 747.126436782 + -473.698705591 + 241.824824022 + -645.624164662 = €-130 Mil.
Cash Flow from Operations was 1980.06465517 + 2036.17001744 + 4436.95803261 + 2140.75470017 = €10,594 Mil.
|Accounts Receivable was €8,961 Mil.
Revenue was 14333.3641319 + 16646.4030819 + 17841.0421355 + 17583.8809156 = €66,405 Mil.
Gross Profit was 5542.82546429 + 8541.37226277 + 6597.09241872 + 9254.04283506 = €29,935 Mil.
Total Current Assets was €31,727 Mil.
Total Assets was €114,262 Mil.
Property, Plant and Equipment(Net PPE) was €63,357 Mil.
Depreciation, Depletion and Amortization(DDA) was €16,654 Mil.
Selling, General & Admin. Expense(SGA) was €862 Mil.
Total Current Liabilities was €18,399 Mil.
Long-Term Debt was €28,578 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(6167.38505747 / 48555.6373017)||/||(8961.47094151 / 66404.6902649)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(4473.51510144 / 66404.6902649)||/||(3320.76149425 / 48555.6373017)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (24874.2816092 + 57988.5057471) / 101294.899425)||/||(1 - (31726.8779451 + 63356.7402753) / 114262.219348)|
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.
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))|
|=||(16653.900321 / (16653.900321 + 63356.7402753))||/||(10192.6652187 / (10192.6652187 + 57988.5057471))|
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)|
|=||(828.82406875 / 48555.6373017)||/||(862.130340649 / 66404.6902649)|
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)|
|=||((27128.2327586 + 13917.9238506) / 101294.899425)||/||((28578.0282731 + 18398.7803751) / 114262.219348)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(349.666196715 - -130.371609449||-||10593.9474054)||/||101294.899425|
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.
Statoil ASA has a M-score of -3.12 suggests that the company will not be a manipulator.
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
Statoil ASA Annual Data
Statoil ASA Quarterly Data