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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.
During the past 13 years, the highest Beneish M-Score of Noble Corp PLC was 9.08. The lowest was -3.60. And the median was -2.64.
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 * 0.9904||+||0.528 * 0.8568||+||0.404 * 0.489||+||0.892 * 0.8591||+||0.115 * 1.1487|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8026||+||4.679 * -0.0908||-||0.327 * 0.8907|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $506 Mil.|
Revenue was 611.973 + 857.684 + 896.671 + 793.555 = $3,160 Mil.
Gross Profit was 344.719 + 544.495 + 585.821 + 456.696 = $1,932 Mil.
Total Current Assets was $952 Mil.
Total Assets was $12,455 Mil.
Property, Plant and Equipment(Net PPE) was $11,388 Mil.
Depreciation, Depletion and Amortization(DDA) was $630 Mil.
Selling, General & Admin. Expense(SGA) was $72 Mil.
Total Current Liabilities was $729 Mil.
Long-Term Debt was $3,864 Mil.
Net Income was 105.485 + -152.241 + 325.807 + 159.031 = $438 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 174.801 + 510.126 + 484.347 + 399.296 = $1,569 Mil.
|Accounts Receivable was $595 Mil.
Revenue was 804.342 + 804.74 + 828.796 + 1240.363 = $3,678 Mil.
Gross Profit was 462.435 + 400.183 + 429.481 + 634.508 = $1,927 Mil.
Total Current Assets was $862 Mil.
Total Assets was $13,158 Mil.
Property, Plant and Equipment(Net PPE) was $12,047 Mil.
Depreciation, Depletion and Amortization(DDA) was $772 Mil.
Selling, General & Admin. Expense(SGA) was $105 Mil.
Total Current Liabilities was $585 Mil.
Long-Term Debt was $4,862 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)|
|=||(506.017 / 3159.883)||/||(594.72 / 3678.241)|
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)|
|=||(544.495 / 3678.241)||/||(344.719 / 3159.883)|
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 - (952.019 + 11387.676) / 12454.912)||/||(1 - (862.363 + 12046.683) / 13157.973)|
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))|
|=||(771.78 / (771.78 + 12046.683))||/||(629.886 / (629.886 + 11387.676))|
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)|
|=||(72.445 / 3159.883)||/||(105.072 / 3678.241)|
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)|
|=||((3864.06 + 728.952) / 12454.912)||/||((4862.361 + 585.423) / 13157.973)|
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|
|=||(438.082 - 0||-||1568.57)||/||12454.912|
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 -3.23 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