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Nabors Industries Ltd (NYSE:NBR)
Beneish M-Score
-3.15 (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 -3.15 suggests that the company is not a manipulator.

NBR' s 10-Year Beneish M-Score Range
Min: -3.82   Max: -1.25
Current: -3.15

-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 -2.53.


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 * 0.6789+0.528 * 0.9797+0.404 * 1.7052+0.892 * 0.9239+0.115 * 0.8753
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0092+4.679 * -0.1129-0.327 * 1.1014
=-3.15

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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 $495 Mil.
Total Current Liabilities was $1,223 Mil.
Long-Term Debt was $3,691 Mil.
Net Income was -36.821 + 123.634 + -891.07 + 106.048 = $-698 Mil.
Non Operating Income was -1.338 + 55.842 + -1020.029 + 1.513 = $-964 Mil.
Cash Flow from Operations was 210.234 + 307.17 + 537.567 + 398.307 = $1,453 Mil.
Accounts Receivable was $1,449 Mil.
Revenue was 1623.471 + 1588.153 + 1606.496 + 1550.194 = $6,368 Mil.
Gross Profit was 556.976 + 526.414 + 573.655 + 568.509 = $2,226 Mil.
Total Current Assets was $2,811 Mil.
Total Assets was $12,436 Mil.
Property, Plant and Equipment(Net PPE) was $8,833 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,111 Mil.
Selling, General & Admin. Expense(SGA) was $531 Mil.
Total Current Liabilities was $1,320 Mil.
Long-Term Debt was $3,956 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)
=(908.563 / 5883.651) / (1448.511 / 6368.314)
=0.15442163 / 0.22745596
=0.6789

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)
=(502.568 / 6368.314) / (374.848 / 5883.651)
=0.34947303 / 0.35669842
=0.9797

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 - (1969.155 + 7405.441) / 10517.283) / (1 - (2810.638 + 8832.966) / 12435.999)
=0.1086485 / 0.06371784
=1.7052

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
=5883.651 / 6368.314
=0.9239

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))
=(1110.517 / (1110.517 + 8832.966)) / (1083.086 / (1083.086 + 7405.441))
=0.1116829 / 0.1275941
=0.8753

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)
=(495.261 / 5883.651) / (531.146 / 6368.314)
=0.08417579 / 0.08340449
=1.0092

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)
=((3691.357 + 1222.753) / 10517.283) / ((3956.29 + 1319.586) / 12435.999)
=0.4672414 / 0.42424223
=1.1014

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
=(-698.209 - -964.012 - 1453.278) / 10517.283
=-0.1129

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 -3.15 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.06910.97420.91551.04050.9311.31250.96060.81331.0720.9949
GMI 0.81630.91271.08991.0650.94681.02771.10481.13130.93741.0719
AQI 1.0391.33670.89150.80980.79681.35460.8840.69311.03710.6826
SGI 1.42381.38571.02291.07350.671.17491.46991.07830.94431.0898
DEPI 1.04461.20320.94130.9550.98250.88650.91050.93310.95510.9642
SGAI 0.88841.21661.02371.02481.33140.67340.98390.99941.05380.9602
LVGI 0.87951.47550.89410.94630.95041.04841.06320.91420.98491.1611
TATA -0.0532-0.0483-0.0424-0.0938-0.1599-0.0776-0.0782-0.1105-0.0784-0.1192
M-score -2.30-2.47-2.71-2.85-3.74-2.21-2.48-3.13-2.86-3.10

Nabors Industries Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.8480.89950.97221.08571.05611.0751.1250.99490.62530.6789
GMI 1.08080.99480.92850.93510.99051.01771.06261.07191.01660.9797
AQI 0.71520.86510.92341.03711.00790.98131.00220.68261.57091.7052
SGI 0.9850.92850.91640.93230.961.00381.05981.08981.06830.9239
DEPI 0.89410.88960.88620.95510.98511.02521.0680.96420.83790.8753
SGAI 1.04371.07961.06511.06311.04991.01330.98480.96020.96061.0092
LVGI 0.94020.93430.94040.98490.95340.9911.06231.16111.13161.1014
TATA -0.1038-0.1148-0.105-0.0784-0.1088-0.0937-0.1022-0.1192-0.119-0.1129
M-score -3.19-3.24-3.14-2.86-2.97-2.84-2.77-3.10-3.14-3.15
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