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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.
Noble Corp PLC has a M-score of -2.73 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Noble Corp PLC was 9.08. The lowest was -3.59. And the median was -2.61.
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 Noble Corp PLC 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 * 0.856||+||0.528 * 0.924||+||0.404 * 0.9981||+||0.892 * 1.2341||+||0.115 * 0.9476|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9227||+||4.679 * -0.0623||-||0.327 * 0.9893|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $1,038 Mil.|
Revenue was 1240.363 + 1251.17 + 1167.049 + 1078.881 = $4,737 Mil.
Gross Profit was 634.508 + 653.207 + 586.098 + 558.807 = $2,433 Mil.
Total Current Assets was $1,412 Mil.
Total Assets was $16,990 Mil.
Property, Plant and Equipment(Net PPE) was $15,274 Mil.
Depreciation, Depletion and Amortization(DDA) was $961 Mil.
Selling, General & Admin. Expense(SGA) was $118 Mil.
Total Current Liabilities was $901 Mil.
Long-Term Debt was $6,014 Mil.
Net Income was 234.559 + 256.326 + 174.06 + 281.957 = $947 Mil.
Non Operating Income was 0 + -83.164 + 0 + 0 = $-83 Mil.
Cash Flow from Operations was 526.027 + 505.796 + 540.663 + 515.589 = $2,088 Mil.
|Accounts Receivable was $983 Mil.
Revenue was 1017.385 + 970.975 + 966.367 + 884.032 = $3,839 Mil.
Gross Profit was 497.364 + 463.678 + 459.417 + 400.869 = $1,821 Mil.
Total Current Assets was $1,344 Mil.
Total Assets was $15,466 Mil.
Property, Plant and Equipment(Net PPE) was $13,844 Mil.
Depreciation, Depletion and Amortization(DDA) was $823 Mil.
Selling, General & Admin. Expense(SGA) was $104 Mil.
Total Current Liabilities was $1,087 Mil.
Long-Term Debt was $5,276 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)|
|=||(1038.287 / 4737.463)||/||(982.857 / 3838.759)|
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)|
|=||(653.207 / 3838.759)||/||(634.508 / 4737.463)|
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 - (1412.076 + 15273.529) / 16989.9)||/||(1 - (1344.226 + 13844.336) / 15466.086)|
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))|
|=||(822.674 / (822.674 + 13844.336))||/||(960.976 / (960.976 + 15273.529))|
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)|
|=||(118.294 / 4737.463)||/||(103.879 / 3838.759)|
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)|
|=||((6013.946 + 900.814) / 16989.9)||/||((5276.304 + 1086.59) / 15466.086)|
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|
|=||(946.902 - -83.164||-||2088.075)||/||16989.9|
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.
Noble Corp PLC has a M-score of -2.73 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
Noble Corp PLC Annual Data
Noble Corp PLC Quarterly Data