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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.
Nabors Industries Ltd has a M-score of -3.07 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Nabors Industries Ltd was -1.25. The lowest was -3.82. And the median was -2.53.
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 * 1.0504||+||0.528 * 0.9927||+||0.404 * 1.0079||+||0.892 * 0.9652||+||0.115 * 0.9679|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.047||+||4.679 * -0.1306||-||0.327 * 0.9534|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,454 Mil.|
Revenue was 1588.153 + 1607.27 + 1549.42 + 1507.767 = $6,253 Mil.
Gross Profit was 526.414 + 573.655 + 568.509 + 508.575 = $2,177 Mil.
Total Current Assets was $2,691 Mil.
Total Assets was $12,187 Mil.
Property, Plant and Equipment(Net PPE) was $8,691 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,133 Mil.
Selling, General & Admin. Expense(SGA) was $530 Mil.
Total Current Liabilities was $1,238 Mil.
Long-Term Debt was $3,812 Mil.
Net Income was 49.919 + 150.603 + -105.381 + -4.361 = $91 Mil.
Non Operating Income was -1.476 + 0 + 0 + 0 = $-1 Mil.
Cash Flow from Operations was 444.563 + 443.508 + 309.307 + 486.113 = $1,683 Mil.
|Accounts Receivable was $1,435 Mil.
Revenue was 1617.794 + 1614.64 + 1637.604 + 1608.165 = $6,478 Mil.
Gross Profit was 622.802 + 601.054 + 530.572 + 484.909 = $2,239 Mil.
Total Current Assets was $3,119 Mil.
Total Assets was $12,585 Mil.
Property, Plant and Equipment(Net PPE) was $8,642 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,086 Mil.
Selling, General & Admin. Expense(SGA) was $525 Mil.
Total Current Liabilities was $1,091 Mil.
Long-Term Debt was $4,380 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)|
|=||(1454.368 / 6252.61)||/||(1434.53 / 6478.203)|
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)|
|=||(573.655 / 6478.203)||/||(526.414 / 6252.61)|
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 - (2691.268 + 8690.759) / 12187.073)||/||(1 - (3118.698 + 8641.947) / 12585.457)|
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))|
|=||(1086 / (1086 + 8641.947))||/||(1133.074 / (1133.074 + 8690.759))|
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)|
|=||(530.128 / 6252.61)||/||(524.59 / 6478.203)|
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)|
|=||((3812.476 + 1238.142) / 12187.073)||/||((4379.758 + 1091.146) / 12585.457)|
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|
|=||(90.78 - -1.476||-||1683.491)||/||12187.073|
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 -3.07 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
Nabors Industries Ltd Annual Data
Nabors Industries Ltd Quarterly Data