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Nabors Industries Ltd (NYSE:NBR)
Beneish M-Score
-3.26 (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.

Nabors Industries Ltd has a M-score of -3.26 suggests that the company is not a manipulator.

NBR' s Beneish M-Score Range Over the Past 10 Years
Min: -4   Max: -1.26
Current: -3.26

-4
-1.26

During the past 13 years, the highest Beneish M-Score of Nabors Industries Ltd was -1.26. The lowest was -4.00. And the median was -2.59.


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 Nabors Industries Ltd 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 * 1.4517+0.528 * 0.9776+0.404 * 0.806+0.892 * 0.4215+0.115 * 1.1693
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2796+4.679 * -0.1159-0.327 * 1.0615
=-3.26

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $595 Mil.
Revenue was 430.763 + 693.685 + 812.431 + 863.37 = $2,800 Mil.
Gross Profit was 65.74 + 248.555 + 294.257 + 374.848 = $983 Mil.
Total Current Assets was $1,259 Mil.
Total Assets was $8,950 Mil.
Property, Plant and Equipment(Net PPE) was $6,942 Mil.
Depreciation, Depletion and Amortization(DDA) was $908 Mil.
Selling, General & Admin. Expense(SGA) was $260 Mil.
Total Current Liabilities was $871 Mil.
Long-Term Debt was $3,584 Mil.
Net Income was -398.294 + -163.654 + -295.834 + -36.821 = $-895 Mil.
Non Operating Income was -182.404 + -124.568 + -259.731 + -1.338 = $-568 Mil.
Cash Flow from Operations was 161.506 + 251.545 + 87.607 + 210.234 = $711 Mil.
Accounts Receivable was $972 Mil.
Revenue was 1422.178 + 1785.003 + 1813.1 + 1623.471 = $6,644 Mil.
Gross Profit was 502.568 + 590.159 + 631.114 + 556.976 = $2,281 Mil.
Total Current Assets was $2,170 Mil.
Total Assets was $10,605 Mil.
Property, Plant and Equipment(Net PPE) was $7,334 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,147 Mil.
Selling, General & Admin. Expense(SGA) was $481 Mil.
Total Current Liabilities was $1,157 Mil.
Long-Term Debt was $3,817 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)
=(594.506 / 2800.249) / (971.601 / 6643.752)
=0.21230469 / 0.14624282
=1.4517

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)
=(2280.817 / 6643.752) / (983.4 / 2800.249)
=0.34330255 / 0.35118306
=0.9776

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 - (1259.387 + 6942.315) / 8950.331) / (1 - (2170.332 + 7333.808) / 10604.598)
=0.0836426 / 0.10377178
=0.806

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
=2800.249 / 6643.752
=0.4215

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))
=(1147.129 / (1147.129 + 7333.808)) / (908.061 / (908.061 + 6942.315))
=0.1352597 / 0.11567102
=1.1693

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)
=(259.529 / 2800.249) / (481.2 / 6643.752)
=0.09268069 / 0.07242895
=1.2796

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)
=((3584.402 + 871.268) / 8950.331) / ((3816.717 + 1156.596) / 10604.598)
=0.49782181 / 0.46897704
=1.0615

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
=(-894.603 - -568.041 - 710.892) / 8950.331
=-0.1159

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.

Nabors Industries Ltd has a M-score of -3.26 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.

Nabors Industries Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.96980.93691.04050.94431.28160.96990.79721.09370.99490.9287
GMI 0.91141.091.0650.97171.00121.10491.14520.9261.07190.9035
AQI 1.33670.89150.80980.79681.35460.8840.69311.03710.6622.4644
SGI 1.39190.99961.07350.66061.20331.45581.10010.92551.08980.5568
DEPI 1.20320.94130.91781.02230.88580.91120.93460.93680.98140.9693
SGAI 1.20961.03711.02481.35520.67050.97070.98821.06580.96021.0596
LVGI 1.47550.89410.94630.95041.04841.06320.91420.98491.15940.9828
TATA -0.0422-0.038-0.0697-0.1848-0.1104-0.0782-0.0984-0.1051-0.1194-0.0943
M-score -2.43-2.69-2.74-3.84-2.38-2.48-3.06-2.99-3.11-2.85

Nabors Industries Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.08571.05611.0751.1250.99490.62530.67890.72850.92871.4517
GMI 0.93510.99051.01771.06261.07191.01660.97970.95630.90350.9776
AQI 1.03711.00790.98131.00220.6621.57091.70521.44692.46440.806
SGI 0.93230.961.00381.05981.08981.06830.92390.73640.55680.4215
DEPI 0.9530.9831.02311.06590.96420.83790.87530.88190.96931.1693
SGAI 0.97110.95960.92660.90230.95610.9320.96681.02971.12291.2796
LVGI 0.98490.95340.9911.06231.15941.13161.10141.07290.98281.0615
TATA -0.0784-0.1088-0.0937-0.1022-0.1194-0.119-0.1129-0.1025-0.0943-0.1159
M-score -2.84-2.95-2.83-2.75-3.11-3.13-3.14-3.33-2.86-3.26
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