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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 -3.20 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 -2.49.
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 * 1.1306||+||0.528 * 1.2364||+||0.404 * 0.9357||+||0.892 * 0.7979||+||0.115 * 0.8848|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1034||+||4.679 * -0.1338||-||0.327 * 1.3086|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $793 Mil.|
Revenue was 970.214 + 1080.9 + 1101.265 + 1259.56 = $4,412 Mil.
Gross Profit was 366.826 + 510.765 + 519.711 + 632.688 = $2,030 Mil.
Total Current Assets was $3,191 Mil.
Total Assets was $8,190 Mil.
Property, Plant and Equipment(Net PPE) was $3,395 Mil.
Depreciation, Depletion and Amortization(DDA) was $673 Mil.
Selling, General & Admin. Expense(SGA) was $1,883 Mil.
Total Current Liabilities was $2,112 Mil.
Long-Term Debt was $5,749 Mil.
Net Income was -376.079 + -745.803 + -299.941 + -396.351 = $-1,818 Mil.
Non Operating Income was -11.876 + -62.009 + -0.363 + -112.826 = $-187 Mil.
Cash Flow from Operations was -485.559 + -89.734 + -62.411 + 102.324 = $-535 Mil.
|Accounts Receivable was $879 Mil.
Revenue was 1330.839 + 1381.971 + 1407.367 + 1409.424 = $5,530 Mil.
Gross Profit was 725.445 + 788.713 + 828.028 + 803.415 = $3,146 Mil.
Total Current Assets was $3,798 Mil.
Total Assets was $9,685 Mil.
Property, Plant and Equipment(Net PPE) was $3,860 Mil.
Depreciation, Depletion and Amortization(DDA) was $662 Mil.
Selling, General & Admin. Expense(SGA) was $2,139 Mil.
Total Current Liabilities was $1,515 Mil.
Long-Term Debt was $5,589 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)|
|=||(793.04 / 4411.939)||/||(879.139 / 5529.601)|
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)|
|=||(510.765 / 5529.601)||/||(366.826 / 4411.939)|
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 - (3190.532 + 3395.029) / 8189.665)||/||(1 - (3798.219 + 3859.611) / 9685.117)|
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))|
|=||(662.031 / (662.031 + 3859.611))||/||(673.201 / (673.201 + 3395.029))|
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)|
|=||(1883.182 / 4411.939)||/||(2139.139 / 5529.601)|
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)|
|=||((5749.29 + 2111.61) / 8189.665)||/||((5589.136 + 1514.836) / 9685.117)|
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|
|=||(-1818.174 - -187.074||-||-535.38)||/||8189.665|
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 -3.20 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