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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 -3.29 suggests that the company is not a 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 -2.50.
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|
|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
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)|
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)|
|=||(366.826 / 5379.737)||/||(327.784 / 4121.131)|
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 - (2572.977 + 3259.529) / 7438.786)||/||(1 - (3791.482 + 3308.898) / 8981.803)|
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))|
|=||(709.959 / (709.959 + 3308.898))||/||(679.968 / (679.968 + 3259.529))|
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)|
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)|
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|
|=||(-2045.134 - -62.805||-||-955.194)||/||7438.786|
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.
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