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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 -2.95 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Nabors Industries Ltd was -1.26. The lowest was -3.83. And the median was -2.53.
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 * 1.0963||+||0.528 * 1.0037||+||0.404 * 0.9813||+||0.892 * 0.9843||+||0.115 * 1.0058|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0225||+||4.679 * -0.1143||-||0.327 * 0.991|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $1,449 Mil.|
Revenue was 1623.471 + 1588.153 + 1607.27 + 1549.42 = $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 $1,133 Mil.
Selling, General & Admin. Expense(SGA) was $531 Mil.
Total Current Liabilities was $1,320 Mil.
Long-Term Debt was $3,956 Mil.
Net Income was 64.444 + 49.919 + 150.603 + -105.381 = $160 Mil.
Non Operating Income was -16.504 + -1.476 + 0 + 0 = $-18 Mil.
Cash Flow from Operations was 401.474 + 444.563 + 443.508 + 309.307 = $1,599 Mil.
|Accounts Receivable was $1,342 Mil.
Revenue was 1507.767 + 1660.961 + 1627.1 + 1674.116 = $6,470 Mil.
Gross Profit was 508.575 + 634.919 + 588.05 + 537.918 = $2,269 Mil.
Total Current Assets was $2,893 Mil.
Total Assets was $12,267 Mil.
Property, Plant and Equipment(Net PPE) was $8,578 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,107 Mil.
Selling, General & Admin. Expense(SGA) was $528 Mil.
Total Current Liabilities was $1,180 Mil.
Long-Term Debt was $4,071 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1448.511 / 6368.314)||/||(1342.386 / 6469.944)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(526.414 / 6469.944)||/||(556.976 / 6368.314)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2810.638 + 8832.966) / 12435.999)||/||(1 - (2892.832 + 8577.586) / 12266.903)|
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.
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))|
|=||(1107.25 / (1107.25 + 8577.586))||/||(1132.787 / (1132.787 + 8832.966))|
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)|
|=||(531.146 / 6368.314)||/||(527.767 / 6469.944)|
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)|
|=||((3956.29 + 1319.586) / 12435.999)||/||((4071.191 + 1180.156) / 12266.903)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(159.585 - -17.98||-||1598.852)||/||12435.999|
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 -2.95 suggests that the company will not be a manipulator.
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
Nabors Industries Ltd Annual Data
Nabors Industries Ltd Quarterly Data