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Nabors Industries Ltd (NYSE:NBR)
Beneish M-Score
-3.10 (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 -3.10 suggests that the company is not a manipulator.

NBR' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.54
Current: -3.1

-3.74
-1.54

During the past 13 years, the highest Beneish M-Score of Nabors Industries Ltd was -1.54. The lowest was -3.74. And the median was -2.60.


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 * 0.9949+0.528 * 1.0719+0.404 * 0.6826+0.892 * 1.0898+0.115 * 0.9642
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9602+4.679 * -0.1192-0.327 * 1.1611
=-3.10

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,518 Mil.
Revenue was 1785.003 + 1813.1 + 1623.471 + 1588.153 = $6,810 Mil.
Gross Profit was 590.159 + 631.114 + 556.976 + 526.414 = $2,305 Mil.
Total Current Assets was $2,742 Mil.
Total Assets was $11,880 Mil.
Property, Plant and Equipment(Net PPE) was $8,599 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,148 Mil.
Selling, General & Admin. Expense(SGA) was $550 Mil.
Total Current Liabilities was $1,567 Mil.
Long-Term Debt was $4,349 Mil.
Net Income was -891.07 + 106.048 + 64.444 + 49.919 = $-671 Mil.
Non Operating Income was -1020.029 + 1.513 + -16.504 + -1.476 = $-1,036 Mil.
Cash Flow from Operations was 537.567 + 398.307 + 401.474 + 444.563 = $1,782 Mil.
Accounts Receivable was $1,400 Mil.
Revenue was 1606.496 + 1550.194 + 1474.147 + 1617.794 = $6,249 Mil.
Gross Profit was 573.655 + 568.509 + 501.837 + 622.802 = $2,267 Mil.
Total Current Assets was $2,754 Mil.
Total Assets was $12,160 Mil.
Property, Plant and Equipment(Net PPE) was $8,598 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,102 Mil.
Selling, General & Admin. Expense(SGA) was $525 Mil.
Total Current Liabilities was $1,311 Mil.
Long-Term Debt was $3,904 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)
=(1517.503 / 6809.727) / (1399.543 / 6248.631)
=0.22284344 / 0.22397594
=0.9949

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)
=(631.114 / 6248.631) / (590.159 / 6809.727)
=0.36276794 / 0.33843692
=1.0719

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 - (2741.874 + 8599.125) / 11879.942) / (1 - (2753.83 + 8597.813) / 12159.811)
=0.04536579 / 0.06646222
=0.6826

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
=6809.727 / 6248.631
=1.0898

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))
=(1101.878 / (1101.878 + 8597.813)) / (1148.459 / (1148.459 + 8599.125))
=0.11359929 / 0.11781986
=0.9642

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)
=(549.734 / 6809.727) / (525.33 / 6248.631)
=0.08072776 / 0.08407121
=0.9602

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)
=((4348.859 + 1567.475) / 11879.942) / ((3904.117 + 1311.424) / 12159.811)
=0.49801034 / 0.42891629
=1.1611

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
=(-670.659 - -1036.496 - 1781.911) / 11879.942
=-0.1192

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 -3.10 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.06910.97420.91551.04050.9311.31250.96060.81331.0720.9949
GMI 0.81630.91271.08991.0650.94681.02771.10481.13130.93741.0719
AQI 1.0391.33670.89150.80980.79681.35460.8840.69311.03710.6826
SGI 1.42381.38571.02291.07350.671.17491.46991.07830.94431.0898
DEPI 1.04461.20320.94130.9550.98250.88650.91050.93310.95510.9642
SGAI 0.88841.21661.02371.02481.33140.67340.98390.99941.05380.9602
LVGI 0.87951.47550.89410.94630.95041.04841.06320.91420.98491.1611
TATA -0.0532-0.0483-0.0424-0.0938-0.1599-0.0776-0.0782-0.1105-0.0784-0.1192
M-score -2.30-2.47-2.71-2.85-3.74-2.21-2.48-3.13-2.86-3.10

Nabors Industries Ltd Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.91150.8030.8480.89950.97221.08571.05611.0751.1250.9949
GMI 1.16071.13411.08080.99480.92850.93510.99051.01771.06261.0719
AQI 0.71420.69310.71520.86510.92341.03711.00790.98131.00220.6826
SGI 1.20031.09210.9850.92850.91640.93230.961.00381.05981.0898
DEPI 0.95040.93310.89410.88960.88620.95510.98511.02521.0680.9642
SGAI 0.97630.99071.04371.07961.06511.06311.04991.01330.98480.9602
LVGI 1.00670.91420.94020.93430.94040.98490.95340.9911.06231.1611
TATA -0.0878-0.1103-0.1038-0.1148-0.105-0.0784-0.1088-0.0937-0.1022-0.1192
M-score -2.83-3.13-3.19-3.24-3.14-2.86-2.97-2.84-2.77-3.10
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