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NII Holdings Inc (NAS:NIHD)
Beneish M-Score
-3.29 (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.

NII Holdings Inc has a M-score of -3.29 suggests that the company is not a manipulator.

NIHD' s 10-Year Beneish M-Score Range
Min: -15.13   Max: 1.48
Current: -3.29

-15.13
1.48

During the past 13 years, the highest Beneish M-Score of NII Holdings Inc was 1.48. The lowest was -15.13. And the median was -2.50.


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 NII Holdings Inc 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 * 0.9821+0.528 * 1.321+0.404 * 1.0309+0.892 * 0.766+0.115 * 1.0235
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1424+4.679 * -0.1381-0.327 * 1.3121
=-3.29

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $485 Mil.
Revenue was 968.752 + 970.214 + 1080.9 + 1101.265 = $4,121 Mil.
Gross Profit was 327.784 + 366.826 + 510.765 + 519.711 = $1,725 Mil.
Total Current Assets was $2,573 Mil.
Total Assets was $7,439 Mil.
Property, Plant and Equipment(Net PPE) was $3,260 Mil.
Depreciation, Depletion and Amortization(DDA) was $680 Mil.
Selling, General & Admin. Expense(SGA) was $1,869 Mil.
Total Current Liabilities was $7,462 Mil.
Long-Term Debt was $222 Mil.
Net Income was -623.311 + -376.079 + -745.803 + -299.941 = $-2,045 Mil.
Non Operating Income was 11.443 + -11.876 + -62.009 + -0.363 = $-63 Mil.
Cash Flow from Operations was -317.49 + -485.559 + -89.734 + -62.411 = $-955 Mil.
Accounts Receivable was $645 Mil.
Revenue was 1259.56 + 1330.839 + 1381.971 + 1407.367 = $5,380 Mil.
Gross Profit was 632.688 + 725.445 + 788.713 + 828.028 = $2,975 Mil.
Total Current Assets was $3,791 Mil.
Total Assets was $8,982 Mil.
Property, Plant and Equipment(Net PPE) was $3,309 Mil.
Depreciation, Depletion and Amortization(DDA) was $710 Mil.
Selling, General & Admin. Expense(SGA) was $2,136 Mil.
Total Current Liabilities was $1,417 Mil.
Long-Term Debt was $5,653 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)
=(485.185 / 4121.131) / (644.922 / 5379.737)
=0.11773103 / 0.11987984
=0.9821

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)
=(366.826 / 5379.737) / (327.784 / 4121.131)
=0.55297759 / 0.41859528
=1.321

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 - (2572.977 + 3259.529) / 7438.786) / (1 - (3791.482 + 3308.898) / 8981.803)
=0.21593308 / 0.20947053
=1.0309

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
=4121.131 / 5379.737
=0.766

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))
=(709.959 / (709.959 + 3308.898)) / (679.968 / (679.968 + 3259.529))
=0.17665694 / 0.17260275
=1.0235

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)
=(1868.958 / 4121.131) / (2135.58 / 5379.737)
=0.45350609 / 0.39696736
=1.1424

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)
=((221.598 + 7461.628) / 7438.786) / ((5653.055 + 1417.188) / 8981.803)
=1.0328602 / 0.78717413
=1.3121

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
=(-2045.134 - -62.805 - -955.194) / 7438.786
=-0.1381

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.

NII Holdings Inc has a M-score of -3.29 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 own currency.

NII Holdings Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98240.99791.00441.05650.8011.31071.00770.90610.92130.9324
GMI 1.03950.98040.971.00171.00751.04230.96050.99151.04451.1616
AQI 2.06930.74381.3731.03530.9060.83920.97241.25661.25260.696
SGI 1.36351.3641.35831.39011.29521.02941.27451.20240.85270.831
DEPI 1.39611.29720.97980.8830.80151.19170.94010.99661.01660.9091
SGAI 0.90481.02081.05370.99371.00330.99821.05861.00361.08491.0622
LVGI 0.9310.96060.82661.05051.03011.07650.92351.1661.0921.2999
TATA -0.0847-0.0486-0.0567-0.0538-0.0599-0.0791-0.0712-0.0695-0.1123-0.1498
M-score -2.03-2.46-2.24-2.35-2.75-2.58-2.59-2.67-3.13-3.55

NII Holdings Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.87350.81451.05430.90731.27370.96520.89280.94680.71490.9821
GMI 0.99561.0271.03851.04721.06391.07011.11651.15861.23641.321
AQI 1.272811.02221.25260.97450.96751.02430.6960.93571.0309
SGI 1.13331.00760.90890.86590.82050.84110.83870.81840.79790.766
DEPI 1.03311.05011.23081.01661.04520.84060.78540.90910.88481.0235
SGAI 1.01371.02680.99371.08561.10171.11291.1351.08961.12331.1424
LVGI 1.0841.0771.05021.0921.17191.21921.25711.29991.30861.3121
TATA -0.0763-0.0544-0.0559-0.1124-0.0978-0.1437-0.1501-0.1498-0.1338-0.1381
M-score -2.75-2.91-2.73-3.13-2.89-3.41-3.49-3.55-3.59-3.29
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