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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.
NII Holdings Inc has a M-score of -3.55 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of NII Holdings Inc was 1.17. The lowest was -3.55. And the median was -2.52.
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 * 0.9307||+||0.528 * 1.1593||+||0.404 * 0.696||+||0.892 * 0.8325||+||0.115 * 0.9091|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0632||+||4.679 * -0.1498||-||0.327 * 1.2999|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $523 Mil.|
Revenue was 1080.9 + 1101.265 + 1259.56 + 1413.396 = $4,855 Mil.
Gross Profit was 510.765 + 519.711 + 632.688 + 765.149 = $2,428 Mil.
Total Current Assets was $3,748 Mil.
Total Assets was $8,680 Mil.
Property, Plant and Equipment(Net PPE) was $3,388 Mil.
Depreciation, Depletion and Amortization(DDA) was $698 Mil.
Selling, General & Admin. Expense(SGA) was $1,950 Mil.
Total Current Liabilities was $2,287 Mil.
Long-Term Debt was $5,697 Mil.
Net Income was -745.803 + -299.941 + -396.351 + -207.504 = $-1,650 Mil.
Non Operating Income was -62.009 + -0.363 + -112.826 + 18.557 = $-157 Mil.
Cash Flow from Operations was -89.734 + -62.411 + 102.324 + -142.63 = $-192 Mil.
|Accounts Receivable was $674 Mil.
Revenue was 1381.971 + 1407.367 + 1409.424 + 1633.148 = $5,832 Mil.
Gross Profit was 788.713 + 828.028 + 803.415 + 961.427 = $3,382 Mil.
Total Current Assets was $3,335 Mil.
Total Assets was $9,223 Mil.
Property, Plant and Equipment(Net PPE) was $3,531 Mil.
Depreciation, Depletion and Amortization(DDA) was $650 Mil.
Selling, General & Admin. Expense(SGA) was $2,203 Mil.
Total Current Liabilities was $1,760 Mil.
Long-Term Debt was $4,766 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)|
|=||(522.563 / 4855.121)||/||(674.459 / 5831.91)|
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)|
|=||(519.711 / 5831.91)||/||(510.765 / 4855.121)|
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 - (3748.186 + 3388.06) / 8679.954)||/||(1 - (3335.032 + 3531.271) / 9223.078)|
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))|
|=||(649.545 / (649.545 + 3531.271))||/||(698.347 / (698.347 + 3388.06))|
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)|
|=||(1949.617 / 4855.121)||/||(2202.616 / 5831.91)|
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)|
|=||((5696.632 + 2286.59) / 8679.954)||/||((4765.505 + 1760.025) / 9223.078)|
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|
|=||(-1649.599 - -156.641||-||-192.451)||/||8679.954|
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 -3.55 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
NII Holdings Inc Quarterly Data