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Nabors Industries Ltd (NYSE:NBR)
Beneish M-Score
-2.98 (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 -2.98 suggests that the company is not a manipulator.

NBR' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.54
Current: -2.98

-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 -2.57.


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 * 1.0726+0.528 * 0.9388+0.404 * 1.0371+0.892 * 0.9438+0.115 * 0.9383
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0563+4.679 * -0.1051-0.327 * 0.9849
=-2.98

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,400 Mil.
Revenue was 1607.27 + 1549.42 + 1507.767 + 1660.961 = $6,325 Mil.
Gross Profit was 573.655 + 568.509 + 508.575 + 634.919 = $2,286 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 $1,124 Mil.
Selling, General & Admin. Expense(SGA) was $528 Mil.
Total Current Liabilities was $1,311 Mil.
Long-Term Debt was $3,904 Mil.
Net Income was 150.603 + -105.381 + -4.361 + 99.121 = $140 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 443.508 + 309.307 + 481.907 + 183.501 = $1,418 Mil.
Accounts Receivable was $1,383 Mil.
Revenue was 1614.64 + 1637.604 + 1608.165 + 1842.009 = $6,702 Mil.
Gross Profit was 601.054 + 530.572 + 484.909 + 657.193 = $2,274 Mil.
Total Current Assets was $3,133 Mil.
Total Assets was $12,656 Mil.
Property, Plant and Equipment(Net PPE) was $8,712 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,060 Mil.
Selling, General & Admin. Expense(SGA) was $530 Mil.
Total Current Liabilities was $1,132 Mil.
Long-Term Debt was $4,379 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)
=(1399.543 / 6325.418) / (1382.623 / 6702.418)
=0.221257 / 0.20628719
=1.0726

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)
=(568.509 / 6702.418) / (573.655 / 6325.418)
=0.33923996 / 0.36134497
=0.9388

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 - (2753.83 + 8597.813) / 12159.811) / (1 - (3132.857 + 8712.088) / 12656.022)
=0.06646222 / 0.06408625
=1.0371

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
=6325.418 / 6702.418
=0.9438

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))
=(1060.238 / (1060.238 + 8712.088)) / (1124.148 / (1124.148 + 8597.813))
=0.10849392 / 0.11562976
=0.9383

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)
=(528.407 / 6325.418) / (530.058 / 6702.418)
=0.08353709 / 0.07908459
=1.0563

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)
=((3904.117 + 1311.424) / 12159.811) / ((4379.336 + 1132.382) / 12656.022)
=0.42891629 / 0.43550161
=0.9849

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
=(139.982 - 0 - 1418.223) / 12159.811
=-0.1051

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 -2.98 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.87850.97280.99461.02290.92040.80060.84010.88640.9581.0726
GMI 1.05571.09271.10041.1351.14881.14671.09371.00920.94240.9388
AQI 0.9650.8840.90550.7640.71420.69310.71520.86510.92341.0371
SGI 1.58631.45151.38921.31921.18871.09540.99430.94220.930.9438
DEPI 0.87240.88910.95570.93160.92920.95630.91630.91090.9070.9383
SGAI 0.91330.96950.94480.91510.96510.9921.04151.07451.05991.0563
LVGI 0.97451.06321.03831.04951.00670.91420.94020.93430.94040.9849
TATA -0.092-0.0936-0.0844-0.0984-0.1088-0.1105-0.109-0.1074-0.1169-0.1051
M-score -2.48-2.57-2.53-2.67-2.94-3.12-3.20-3.19-3.19-2.98
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