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Nabors Industries Ltd (NYSE:NBR)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

NBR' s 10-Year Beneish M-Score Range
Min: -3.82   Max: -1.25
Current: -2.89

-3.82
-1.25

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 -2.55.


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 * 1.125+0.528 * 1.0626+0.404 * 1.0022+0.892 * 1.0598+0.115 * 1.0494
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9848+4.679 * -0.128-0.327 * 1.0623
=-2.89

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,624 Mil.
Revenue was 1813.1 + 1623.471 + 1588.153 + 1606.496 = $6,631 Mil.
Gross Profit was 631.114 + 556.976 + 526.414 + 573.655 = $2,288 Mil.
Total Current Assets was $2,792 Mil.
Total Assets was $12,619 Mil.
Property, Plant and Equipment(Net PPE) was $9,017 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,135 Mil.
Selling, General & Admin. Expense(SGA) was $542 Mil.
Total Current Liabilities was $1,416 Mil.
Long-Term Debt was $4,255 Mil.
Net Income was 106.048 + 64.444 + 49.919 + 150.603 = $371 Mil.
Non Operating Income was 1.513 + -16.504 + -1.476 + 314.486 = $298 Mil.
Cash Flow from Operations was 398.307 + 401.474 + 444.563 + 443.508 = $1,688 Mil.
Accounts Receivable was $1,362 Mil.
Revenue was 1550.194 + 1474.147 + 1617.794 + 1614.64 = $6,257 Mil.
Gross Profit was 568.509 + 501.837 + 622.802 + 601.054 = $2,294 Mil.
Total Current Assets was $2,956 Mil.
Total Assets was $12,202 Mil.
Property, Plant and Equipment(Net PPE) was $8,464 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,125 Mil.
Selling, General & Admin. Expense(SGA) was $519 Mil.
Total Current Liabilities was $1,125 Mil.
Long-Term Debt was $4,036 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)
=(1624.441 / 6631.22) / (1362.434 / 6256.775)
=0.24496865 / 0.2177534
=1.125

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)
=(556.976 / 6256.775) / (631.114 / 6631.22)
=0.36667484 / 0.34505853
=1.0626

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 - (2792.471 + 9016.508) / 12619.34) / (1 - (2956.455 + 8463.804) / 12202.116)
=0.0642158 / 0.06407553
=1.0022

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
=6631.22 / 6256.775
=1.0598

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))
=(1124.755 / (1124.755 + 8463.804)) / (1134.73 / (1134.73 + 9016.508))
=0.11730178 / 0.11178242
=1.0494

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)
=(542.17 / 6631.22) / (519.442 / 6256.775)
=0.08176022 / 0.08302073
=0.9848

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)
=((4255.136 + 1415.581) / 12619.34) / ((4036.027 + 1125.422) / 12202.116)
=0.44936716 / 0.42299622
=1.0623

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
=(371.014 - 298.019 - 1687.852) / 12619.34
=-0.128

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 -2.89 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03411.06910.97420.91551.04050.9311.29990.97280.81091.072
GMI 0.94040.81630.91271.08991.0650.94681.02761.09271.1440.9374
AQI 0.4941.0391.33670.89150.80980.79681.35460.8840.69311.0371
SGI 1.27241.42381.38571.02291.07350.671.18631.45151.08150.9443
DEPI 0.90131.04461.20320.94130.9550.98250.88580.88910.95630.9383
SGAI 0.92840.88841.21661.02371.02481.33140.68250.96951.00071.0538
LVGI 0.8880.87951.47550.89410.94630.95041.04841.06320.91420.9849
TATA -0.0506-0.0532-0.0483-0.0424-0.0938-0.1599-0.0869-0.0936-0.1105-0.1051
M-score -2.64-2.30-2.47-2.71-2.85-3.74-2.26-2.57-3.12-2.98

Nabors Industries Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02290.92040.80060.84570.89710.96961.08571.05611.0751.125
GMI 1.1351.14881.14671.09231.00550.93870.93510.99051.01771.0626
AQI 0.7640.71420.69310.71520.86510.92341.03711.00790.98131.0022
SGI 1.31921.18871.09540.98770.93090.91880.93230.961.00381.0598
DEPI 0.93160.92920.95630.91630.91090.9070.93830.96791.00731.0494
SGAI 0.91510.96510.9921.04511.08111.06651.06311.04991.01330.9848
LVGI 1.04951.00670.91420.94020.93430.94040.98490.95340.9911.0623
TATA -0.0859-0.0956-0.1103-0.1038-0.1148-0.105-0.1051-0.1355-0.1198-0.128
M-score -2.61-2.87-3.12-3.18-3.23-3.14-2.99-3.10-2.96-2.89
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