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Nabors Industries Ltd (NYSE:NBR)
Beneish M-Score
-3.39 (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 -3.39 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: -3.39

-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 -2.61.


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 * 1.3303+0.528 * 1.116+0.404 * 0.7441+0.892 * 0.4171+0.115 * 1.0788
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3017+4.679 * -0.1244-0.327 * 1.0808
=-3.39

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $504 Mil.
Revenue was 517.092 + 430.763 + 693.685 + 812.431 = $2,454 Mil.
Gross Profit was 175.813 + 65.74 + 248.555 + 294.257 = $784 Mil.
Total Current Assets was $1,191 Mil.
Total Assets was $8,656 Mil.
Property, Plant and Equipment(Net PPE) was $6,765 Mil.
Depreciation, Depletion and Amortization(DDA) was $907 Mil.
Selling, General & Admin. Expense(SGA) was $230 Mil.
Total Current Liabilities was $868 Mil.
Long-Term Debt was $3,503 Mil.
Net Income was -184.65 + -398.294 + -163.654 + -295.834 = $-1,042 Mil.
Non Operating Income was -74.607 + -182.404 + -124.568 + -259.731 = $-641 Mil.
Cash Flow from Operations was 175.166 + 161.506 + 251.545 + 87.607 = $676 Mil.
Accounts Receivable was $909 Mil.
Revenue was 863.37 + 1422.178 + 1785.003 + 1813.1 = $5,884 Mil.
Gross Profit was 374.848 + 502.568 + 590.159 + 631.114 = $2,099 Mil.
Total Current Assets was $1,969 Mil.
Total Assets was $10,517 Mil.
Property, Plant and Equipment(Net PPE) was $7,405 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,083 Mil.
Selling, General & Admin. Expense(SGA) was $423 Mil.
Total Current Liabilities was $1,223 Mil.
Long-Term Debt was $3,691 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)
=(504.099 / 2453.971) / (908.563 / 5883.651)
=0.20542174 / 0.15442163
=1.3303

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)
=(2098.689 / 5883.651) / (784.365 / 2453.971)
=0.35669842 / 0.31963092
=1.116

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 - (1191.243 + 6765.257) / 8656.305) / (1 - (1969.155 + 7405.441) / 10517.283)
=0.08084339 / 0.1086485
=0.7441

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
=2453.971 / 5883.651
=0.4171

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))
=(1083.086 / (1083.086 + 7405.441)) / (907.49 / (907.49 + 6765.257))
=0.1275941 / 0.11827446
=1.0788

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)
=(229.863 / 2453.971) / (423.38 / 5883.651)
=0.09366981 / 0.07195872
=1.3017

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)
=((3503.172 + 868.175) / 8656.305) / ((3691.357 + 1222.753) / 10517.283)
=0.50498995 / 0.4672414
=1.0808

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
=(-1042.432 - -641.31 - 675.824) / 8656.305
=-0.1244

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 -3.39 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 0.97420.91551.04050.9311.31250.96350.81091.0720.99490.9287
GMI 0.91271.08991.0650.94681.02771.09261.1440.93741.07190.9035
AQI 1.33670.89150.80980.79681.35460.8840.69311.03710.6622.4644
SGI 1.38571.02291.07350.671.17491.46561.08150.94431.08980.5568
DEPI 1.20320.94130.9550.98250.88650.88840.95840.9530.96420.9693
SGAI 1.21661.02371.02481.33140.67340.98261.00070.96260.95611.1649
LVGI 1.47550.89410.94630.95041.04841.06320.91420.98491.15940.9828
TATA -0.0483-0.0424-0.1126-0.1849-0.0776-0.0936-0.0983-0.0784-0.1194-0.0943
M-score -2.47-2.71-2.94-3.86-2.21-2.56-3.07-2.84-3.11-2.87

Nabors Industries Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.05611.0751.1250.99490.62530.67890.72850.92871.45171.3303
GMI 0.99051.01771.06261.07191.01660.97970.95630.90350.97761.116
AQI 1.00790.98131.00220.6621.57091.70521.44692.46440.8060.7441
SGI 0.961.00381.05981.08981.06830.92390.73640.55680.42150.4171
DEPI 0.9831.02311.06590.96420.83790.87530.88190.96931.16931.0788
SGAI 0.95960.92660.90230.95610.9320.94351.00111.08521.22791.3017
LVGI 0.95340.9911.06231.15941.13161.10141.07290.98281.06151.0808
TATA -0.1088-0.0937-0.1022-0.1194-0.119-0.1129-0.1025-0.0943-0.1159-0.1244
M-score -2.95-2.83-2.75-3.11-3.13-3.14-3.32-2.85-3.25-3.39
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