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NetSuite Inc (NYSE:N)
Beneish M-Score
-2.79 (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.

NetSuite Inc has a M-score of -2.79 suggests that the company is not a manipulator.

N' s Beneish M-Score Range Over the Past 10 Years
Min: -3.56   Max: 1.33
Current: -2.79

-3.56
1.33

During the past 13 years, the highest Beneish M-Score of NetSuite Inc was 1.33. The lowest was -3.56. And the median was -3.03.


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 NetSuite Inc 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 * 1.086+0.528 * 1.017+0.404 * 1.5406+0.892 * 1.3494+0.115 * 0.995
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0106+4.679 * -0.1989-0.327 * 0.9733
=-2.79

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $156.8 Mil.
Revenue was 192.823 + 177.28 + 164.817 + 157.869 = $692.8 Mil.
Gross Profit was 126.727 + 118.139 + 112.456 + 107.332 = $464.7 Mil.
Total Current Assets was $620.6 Mil.
Total Assets was $1,093.3 Mil.
Property, Plant and Equipment(Net PPE) was $82.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.8 Mil.
Selling, General & Admin. Expense(SGA) was $446.9 Mil.
Total Current Liabilities was $468.1 Mil.
Long-Term Debt was $278.6 Mil.
Net Income was -37.34 + -32.287 + -22.713 + -25.345 = $-117.7 Mil.
Non Operating Income was -0.214 + -0.266 + 0.002 + -0.01 = $-0.5 Mil.
Cash Flow from Operations was 27.479 + 23.907 + 27.967 + 20.948 = $100.3 Mil.
Accounts Receivable was $107.0 Mil.
Revenue was 143.66 + 131.794 + 122.961 + 115.008 = $513.4 Mil.
Gross Profit was 97.661 + 90.197 + 84.284 + 78.057 = $350.2 Mil.
Total Current Assets was $609.9 Mil.
Total Assets was $863.9 Mil.
Property, Plant and Equipment(Net PPE) was $54.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.8 Mil.
Selling, General & Admin. Expense(SGA) was $327.7 Mil.
Total Current Liabilities was $336.9 Mil.
Long-Term Debt was $269.4 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)
=(156.792 / 692.789) / (106.995 / 513.423)
=0.22631999 / 0.20839542
=1.086

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)
=(118.139 / 513.423) / (126.727 / 692.789)
=0.6820867 / 0.6707006
=1.017

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 - (620.622 + 82.893) / 1093.27) / (1 - (609.884 + 54.14) / 863.938)
=0.35650388 / 0.23139855
=1.5406

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
=692.789 / 513.423
=1.3494

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))
=(27.756 / (27.756 + 54.14)) / (42.822 / (42.822 + 82.893))
=0.33891765 / 0.34062761
=0.995

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)
=(446.859 / 692.789) / (327.679 / 513.423)
=0.64501457 / 0.63822423
=1.0106

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)
=((278.598 + 468.118) / 1093.27) / ((269.367 + 336.874) / 863.938)
=0.68301152 / 0.70171818
=0.9733

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
=(-117.685 - -0.488 - 100.301) / 1093.27
=-0.1989

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.

NetSuite Inc has a M-score of -2.79 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.

NetSuite Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.75791.01560.88470.9111.17351.26930.99731.19490.9527
GMI 0.95491.01111.02750.9740.97241.01391.02480.98781.0199
AQI 0.1738.95611.64190.82760.84090.90061.07181.27761.6795
SGI 1.61511.40481.09221.15981.22351.30681.34221.3421.3323
DEPI 1.11952.11790.73611.09751.03071.02321.1470.93490.9711
SGAI 0.78990.96070.95770.99861.01870.96971.01181.01361.003
LVGI 0.2591.03491.02171.04751.09281.06711.30691.02610.9696
TATA -0.1295-0.0278-0.1371-0.2075-0.2427-0.241-0.1712-0.1892-0.1894
M-score -2.831.11-2.90-3.48-3.37-3.13-3.02-2.79-2.82

NetSuite Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.01220.99730.97151.08151.23051.19491.11081.13721.0860.9527
GMI 1.02821.02481.01210.99810.990.98780.99261.00511.0171.0199
AQI 0.92441.07180.94751.08791.67841.27761.22562.31191.54061.6795
SGI 1.33551.34221.34641.33351.33531.3421.34161.35031.34941.3323
DEPI 1.18551.1470.88910.91080.9430.93490.98070.99880.9950.9711
SGAI 1.01061.01181.00960.98411.00931.01361.00821.041.01061.003
LVGI 1.31581.30691.31961.04091.041.02611.04690.95320.97330.9696
TATA -0.1628-0.1712-0.1854-0.1881-0.1917-0.1892-0.2-0.1864-0.1989-0.1926
M-score -3.03-3.02-3.20-2.97-2.62-2.79-2.94-2.37-2.79-2.84
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