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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 Corporation PLC has a M-score of -2.62 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Noble Corporation PLC was -1.13. The lowest was -3.59. And the median was -2.63.
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 Corporation 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 * 1.0659||+||0.528 * 0.9313||+||0.404 * 0.8761||+||0.892 * 1.1938||+||0.115 * 0.9661|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9885||+||4.679 * -0.0567||-||0.327 * 1.0733|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $1,089 Mil.|
Revenue was 1167.049 + 1078.881 + 1017.385 + 970.975 = $4,234 Mil.
Gross Profit was 586.098 + 558.807 + 493.299 + 459.717 = $2,098 Mil.
Total Current Assets was $1,391 Mil.
Total Assets was $16,218 Mil.
Property, Plant and Equipment(Net PPE) was $14,558 Mil.
Depreciation, Depletion and Amortization(DDA) was $879 Mil.
Selling, General & Admin. Expense(SGA) was $118 Mil.
Total Current Liabilities was $1,052 Mil.
Long-Term Debt was $5,556 Mil.
Net Income was 174.06 + 281.957 + 176.62 + 150.06 = $783 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 540.663 + 515.589 + 443.513 + 202.552 = $1,702 Mil.
|Accounts Receivable was $856 Mil.
Revenue was 966.367 + 884.032 + 898.923 + 797.69 = $3,547 Mil.
Gross Profit was 459.417 + 400.869 + 438.604 + 337.846 = $1,637 Mil.
Total Current Assets was $1,305 Mil.
Total Assets was $14,608 Mil.
Property, Plant and Equipment(Net PPE) was $13,026 Mil.
Depreciation, Depletion and Amortization(DDA) was $759 Mil.
Selling, General & Admin. Expense(SGA) was $100 Mil.
Total Current Liabilities was $911 Mil.
Long-Term Debt was $4,634 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)|
|=||(1089.338 / 4234.29)||/||(856.096 / 3547.012)|
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)|
|=||(558.807 / 3547.012)||/||(586.098 / 4234.29)|
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 - (1390.935 + 14558.09) / 16217.957)||/||(1 - (1305.325 + 13025.972) / 14607.774)|
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))|
|=||(758.621 / (758.621 + 13025.972))||/||(879.422 / (879.422 + 14558.09))|
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)|
|=||(117.997 / 4234.29)||/||(99.99 / 3547.012)|
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)|
|=||((5556.251 + 1051.915) / 16217.957)||/||((4634.375 + 911.449) / 14607.774)|
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|
|=||(782.697 - 0||-||1702.317)||/||16217.957|
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 Corporation PLC has a M-score of -2.62 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 Corporation PLC Annual Data
Noble Corporation PLC Quarterly Data