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GuruFocus has detected 6 Warning Signs with Noble Corp PLC $NE.
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Noble Corp PLC (NYSE:NE)
Beneish M-Score
-3.55 (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.

Noble Corp PLC has a M-score of -3.55 suggests that the company is not a manipulator.

NE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.59   Max: -1.28
Current: -3.55

-3.59
-1.28

During the past 13 years, the highest Beneish M-Score of Noble Corp PLC was -1.28. The lowest was -3.59. And the median was -2.64.


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 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 * 0.9315+0.528 * 1.022+0.404 * 1.4757+0.892 * 0.6867+0.115 * 0.9143
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3125+4.679 * -0.1814-0.327 * 1.0457
=-3.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $319 Mil.
Revenue was 410.156 + 385.153 + 894.783 + 611.973 = $2,302 Mil.
Gross Profit was 227.293 + 168.807 + 636.309 + 344.719 = $1,377 Mil.
Total Current Assets was $1,193 Mil.
Total Assets was $11,440 Mil.
Property, Plant and Equipment(Net PPE) was $10,062 Mil.
Depreciation, Depletion and Amortization(DDA) was $611 Mil.
Selling, General & Admin. Expense(SGA) was $69 Mil.
Total Current Liabilities was $633 Mil.
Long-Term Debt was $4,040 Mil.
Net Income was -1302.85 + -55.081 + 322.866 + 105.485 = $-930 Mil.
Non Operating Income was 6.748 + 0 + 11.066 + 0 = $18 Mil.
Cash Flow from Operations was 165.607 + 101.118 + 686.756 + 174.801 = $1,128 Mil.
Accounts Receivable was $499 Mil.
Revenue was 857.684 + 896.671 + 793.555 + 804.342 = $3,352 Mil.
Gross Profit was 544.495 + 585.821 + 456.696 + 462.435 = $2,049 Mil.
Total Current Assets was $1,241 Mil.
Total Assets was $12,866 Mil.
Property, Plant and Equipment(Net PPE) was $11,484 Mil.
Depreciation, Depletion and Amortization(DDA) was $634 Mil.
Selling, General & Admin. Expense(SGA) was $77 Mil.
Total Current Liabilities was $864 Mil.
Long-Term Debt was $4,163 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)
=(319.152 / 2302.065) / (498.931 / 3352.252)
=0.13863727 / 0.14883457
=0.9315

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)
=(2049.447 / 3352.252) / (1377.128 / 2302.065)
=0.61136424 / 0.59821421
=1.022

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 - (1192.614 + 10061.948) / 11440.117) / (1 - (1240.618 + 11483.623) / 12865.645)
=0.01621968 / 0.01099082
=1.4757

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
=2302.065 / 3352.252
=0.6867

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))
=(634.305 / (634.305 + 11483.623)) / (611.067 / (611.067 + 10061.948))
=0.05234434 / 0.05725346
=0.9143

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)
=(69.258 / 2302.065) / (76.843 / 3352.252)
=0.03008516 / 0.0229228
=1.3125

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)
=((4040.229 + 633.293) / 11440.117) / ((4162.638 + 863.584) / 12865.645)
=0.40852047 / 0.39067004
=1.0457

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
=(-929.58 - 17.814 - 1128.282) / 11440.117
=-0.1814

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 -3.55 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 local exchange's currency.

Noble Corp PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.05310.91410.95050.77611.57821.55151.10650.47080.84540.9315
GMI 0.92950.92850.96561.26031.21910.86331.01710.99960.84281.022
AQI 1.08940.82511.07710.91780.74090.83690.87611.11540.59421.4757
SGI 1.42621.15061.05640.7710.96030.81631.15331.27361.0370.6867
DEPI 1.07010.96911.02471.13710.990.93580.96610.8561.27140.9143
SGAI 1.30060.75071.02481.48661.03431.34051.02320.71050.6941.3125
LVGI 0.89020.93310.70142.15151.19571.04581.07331.02290.93741.0457
TATA -0.0374-0.046-0.0546-0.0769-0.0274-0.0588-0.0567-0.1332-0.0973-0.1814
M-score -2.23-2.69-2.62-3.59-2.17-2.63-2.58-3.27-3.19-3.55

Noble Corp PLC Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.50270.62220.66480.55710.83070.84540.87290.64850.7230.9315
GMI 1.08870.97210.97810.96920.90310.84280.86150.83590.93711.022
AQI 1.1421.11541.25750.9470.76140.59420.4890.61490.55371.4757
SGI 1.40190.96381.021.091.04651.0370.97481.00920.83340.6867
DEPI 0.82920.8560.96961.10661.34781.27141.14871.02371.01110.9143
SGAI 0.70250.93890.87250.77880.7970.6940.70730.68140.91811.3125
LVGI 0.96641.02291.0281.01271.00890.93740.89070.88080.91981.0457
TATA -0.0815-0.1332-0.13-0.1257-0.1216-0.0973-0.0908-0.0993-0.1004-0.1814
M-score -2.81-3.46-3.28-3.39-3.24-3.19-3.22-3.41-3.53-3.55
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