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NII Holdings Inc (NAS:NIHD)
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.

NII Holdings Inc has a M-score of -3.55 suggests that the company is not a manipulator.

NIHD' s 10-Year Beneish M-Score Range
Min: -3.55   Max: 1.17
Current: -3.55

-3.55
1.17

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.


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 * 0.9307+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
=-3.55

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

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

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)
=(522.563 / 4855.121) / (674.459 / 5831.91)
=0.1076313 / 0.11564976
=0.9307

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)
=(519.711 / 5831.91) / (510.765 / 4855.121)
=0.57984142 / 0.50015499
=1.1593

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 - (3748.186 + 3388.06) / 8679.954) / (1 - (3335.032 + 3531.271) / 9223.078)
=0.17784749 / 0.2555302
=0.696

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
=4855.121 / 5831.91
=0.8325

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))
=0.15536321 / 0.17089512
=0.9091

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)
=0.40155889 / 0.37768347
=1.0632

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)
=0.91973091 / 0.70752194
=1.2999

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
=(-1649.599 - -156.641 - -192.451) / 8679.954
=-0.1498

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.


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 0.98240.99791.05841.06630.75321.31071.00770.90610.92130.9324
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 -2.03-2.46-2.19-2.34-2.79-2.58-2.59-2.67-3.13-3.55

NII Holdings Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.90070.90610.87350.81451.05430.90731.25490.95060.87850.9307
GMI 0.97650.99150.99561.0271.03851.04721.06641.07221.1181.1593
AQI 1.18221.25661.272811.02221.25260.97450.96751.02430.696
SGI 1.25261.20241.13331.00760.90890.86590.83270.8540.85240.8325
DEPI 0.94550.99661.03311.05011.23081.01661.01770.84060.78540.9091
SGAI 1.04391.00361.01371.02680.99371.08561.09551.08871.1091.0632
LVGI 1.11431.1661.0841.0771.05021.0921.17191.21921.25711.2999
TATA -0.0675-0.0695-0.0763-0.0544-0.0559-0.1124-0.0978-0.1437-0.1501-0.1498
M-score -2.65-2.67-2.75-2.91-2.73-3.13-2.90-3.41-3.48-3.55
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