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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 NII Holdings Inc was 1.48. The lowest was -15.13. And the median was -2.58.
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 * 0.9957||+||0.528 * 1.3553||+||0.404 * 1.2876||+||0.892 * 0.7829||+||0.115 * 0.7937|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1176||+||4.679 * -0.2063||-||0.327 * 0.4894|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $399 Mil.|
Revenue was $3,689 Mil.
Gross Profit was $1,406 Mil.
Total Current Assets was $1,713 Mil.
Total Assets was $5,431 Mil.
Property, Plant and Equipment(Net PPE) was $2,433 Mil.
Depreciation, Depletion and Amortization(DDA) was $673 Mil.
Selling, General & Admin. Expense(SGA) was $1,699 Mil.
Total Current Liabilities was $1,709 Mil.
Long-Term Debt was $735 Mil.
Net Income was $-1,958 Mil.
Non Operating Income was $-209 Mil.
Cash Flow from Operations was $-629 Mil.
|Accounts Receivable was $511 Mil.
Revenue was $4,712 Mil.
Gross Profit was $2,435 Mil.
Total Current Assets was $3,748 Mil.
Total Assets was $8,680 Mil.
Property, Plant and Equipment(Net PPE) was $3,338 Mil.
Depreciation, Depletion and Amortization(DDA) was $693 Mil.
Selling, General & Admin. Expense(SGA) was $1,942 Mil.
Total Current Liabilities was $2,287 Mil.
Long-Term Debt was $5,697 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)|
|=||(398.678 / 3688.72)||/||(511.406 / 4711.567)|
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)|
|=||( / 4711.567)||/||( / 3688.72)|
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 - (1713.412 + 2432.933) / 5430.591)||/||(1 - (3748.186 + 3337.545) / 8679.954)|
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))|
|=||(692.927 / (692.927 + 3337.545))||/||(672.705 / (672.705 + 2432.933))|
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)|
|=||(1699.058 / 3688.72)||/||(1941.773 / 4711.567)|
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)|
|=||((734.823 + 1709.38) / 5430.591)||/||((5696.632 + 2286.59) / 8679.954)|
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|
|=||(-1957.698 - -208.821||-||-628.716)||/||5430.591|
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 -3.22 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
NII Holdings Inc Annual Data