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NetSuite Inc (NYSE:N)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

N' s Beneish M-Score Range Over the Past 10 Years
Min: -3.48   Max: 1.11
Current: -2.84

-3.48
1.11

During the past 13 years, the highest Beneish M-Score of NetSuite Inc was 1.11. The lowest was -3.48. And the median was -3.02.


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 * 0.9527+0.528 * 1.0199+0.404 * 1.6795+0.892 * 1.3323+0.115 * 0.9711
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.003+4.679 * -0.1926-0.327 * 0.9733
=-2.84

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $176.7 Mil.
Revenue was 206.229 + 192.823 + 177.28 + 164.817 = $741.1 Mil.
Gross Profit was 138.399 + 126.727 + 118.139 + 112.456 = $495.7 Mil.
Total Current Assets was $655.1 Mil.
Total Assets was $1,141.0 Mil.
Property, Plant and Equipment(Net PPE) was $89.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.2 Mil.
Selling, General & Admin. Expense(SGA) was $475.8 Mil.
Total Current Liabilities was $519.1 Mil.
Long-Term Debt was $281.0 Mil.
Net Income was -32.403 + -37.34 + -32.287 + -22.713 = $-124.7 Mil.
Non Operating Income was -4.885 + -0.214 + -0.266 + 0.002 = $-5.4 Mil.
Cash Flow from Operations was 21.054 + 27.479 + 23.907 + 27.967 = $100.4 Mil.
Accounts Receivable was $139.2 Mil.
Revenue was 157.869 + 143.66 + 131.794 + 122.961 = $556.3 Mil.
Gross Profit was 107.332 + 97.661 + 90.197 + 84.284 = $379.5 Mil.
Total Current Assets was $673.0 Mil.
Total Assets was $922.2 Mil.
Property, Plant and Equipment(Net PPE) was $58.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $30.1 Mil.
Selling, General & Admin. Expense(SGA) was $356.1 Mil.
Total Current Liabilities was $392.8 Mil.
Long-Term Debt was $271.6 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)
=(176.72 / 741.149) / (139.221 / 556.284)
=0.23844058 / 0.25026965
=0.9527

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)
=(126.727 / 556.284) / (138.399 / 741.149)
=0.68215875 / 0.66885471
=1.0199

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 - (655.1 + 89.643) / 1140.976) / (1 - (673.001 + 58.539) / 922.239)
=0.34727549 / 0.20677829
=1.6795

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
=741.149 / 556.284
=1.3323

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))
=(30.108 / (30.108 + 58.539)) / (48.215 / (48.215 + 89.643))
=0.33963924 / 0.34974394
=0.9711

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)
=(475.842 / 741.149) / (356.099 / 556.284)
=0.64203284 / 0.64013885
=1.003

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)
=((280.982 + 519.05) / 1140.976) / ((271.638 + 392.773) / 922.239)
=0.70118215 / 0.72043256
=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
=(-124.743 - -5.363 - 100.407) / 1140.976
=-0.1926

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 -2.84 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 1.11950.99891.56081.09751.03071.02321.1470.93490.9711
SGAI 0.78990.96070.95770.99861.01870.96971.01181.01361.003
LVGI 0.2591.03491.02171.04751.09281.06711.30691.02610.9733
TATA -0.1295-0.0278-0.1372-0.2075-0.2427-0.241-0.1712-0.1892-0.1894
M-score -2.830.98-2.81-3.48-3.37-3.13-3.02-2.79-2.82

NetSuite Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.99730.97151.08151.23051.19491.11081.13721.0860.95271.0032
GMI 1.02481.01210.99810.990.98780.99261.00511.0171.01991.0235
AQI 1.07180.94751.08791.67841.27761.22562.31191.54061.67951.705
SGI 1.34221.34641.33351.33531.3421.34161.35031.34941.33231.3256
DEPI 1.1470.88910.91080.9430.93490.98070.99880.9950.97110.9418
SGAI 1.01181.00960.98411.00931.01361.00821.041.01061.0031.0046
LVGI 1.30691.31961.04091.041.02611.04690.95320.97330.97330.966
TATA -0.1712-0.1854-0.1881-0.1917-0.1892-0.2-0.1864-0.1989-0.1926-0.1952
M-score -3.02-3.20-2.97-2.62-2.79-2.94-2.37-2.79-2.84-2.80
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