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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: -3.72   Max: -1.26
Current: -2.89

-3.72
-1.26

During the past 13 years, the highest Beneish M-Score of Nabors Industries Ltd was -1.26. The lowest was -3.72. And the median was -2.54.


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 * 1.1272+0.528 * 1.0545+0.404 * 1.0022+0.892 * 1.0577+0.115 * 1.0478
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9843+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 + 1627.1 = $6,269 Mil.
Gross Profit was 568.509 + 501.837 + 622.802 + 588.05 = $2,281 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 $1,123 Mil.
Selling, General & Admin. Expense(SGA) was $521 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 / 6269.235)
=0.24496865 / 0.21732061
=1.1272

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 / 6269.235) / (631.114 / 6631.22)
=0.36387183 / 0.34505853
=1.0545

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 / 6269.235
=1.0577

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))
=(1122.847 / (1122.847 + 8463.804)) / (1134.73 / (1134.73 + 9016.508))
=0.1171261 / 0.11178242
=1.0478

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) / (520.746 / 6269.235)
=0.08176022 / 0.08306372
=0.9843

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 1.03341.04940.96980.93691.04050.94431.28160.96990.79721.0937
GMI 0.93930.81730.91141.091.0650.97171.00121.10491.14520.926
AQI 0.87710.58521.33670.89150.81370.7931.35460.8840.69311.0371
SGI 1.27321.45051.39190.99961.07350.66061.20331.45581.10010.9255
DEPI 0.90141.04461.20320.94130.91211.02870.88580.91120.93460.9368
SGAI 0.92780.8821.20961.03711.02481.35520.67050.97070.98821.0658
LVGI 0.8880.87951.47550.89411.00860.89181.04841.06320.91420.9849
TATA -0.046-0.0531-0.0556-0.0382-0.07-0.1599-0.0869-0.0939-0.1105-0.1051
M-score -2.46-2.48-2.50-2.69-2.76-3.70-2.27-2.56-3.12-2.99

Nabors Industries Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02680.92350.79720.84070.89010.97051.09371.06411.08331.1272
GMI 1.13371.15051.14521.09731.01030.93860.9260.98061.00731.0545
AQI 0.7640.71420.69310.71520.86510.92341.03711.00790.98131.0022
SGI 1.31421.18481.10010.99360.93820.9180.92550.95280.99611.0577
DEPI 0.95390.9510.93460.9090.89090.88760.93680.96631.00581.0478
SGAI 0.90220.94290.98821.04471.08431.07991.06581.05281.01630.9843
LVGI 1.04951.00670.91420.94020.93430.94040.98490.95340.9911.0623
TATA -0.0988-0.1092-0.1105-0.104-0.1019-0.0912-0.1051-0.1355-0.1198-0.128
M-score -2.67-2.93-3.12-3.18-3.17-3.08-2.99-3.10-2.97-2.89
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