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NII Holdings Inc (NAS:NIHD)
Beneish M-Score
-3.72 (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 -3.22 suggests that the company is not a manipulator.

NIHD' s 10-Year Beneish M-Score Range
Min: -15.13   Max: 1.48
Current: -3.72

-15.13
1.48

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.


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 * 0.9957+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
=-3.22

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

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

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)
=(398.678 / 3688.72) / (511.406 / 4711.567)
=0.10808031 / 0.10854266
=0.9957

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)
=( / 4711.567) / ( / 3688.72)
=0.51673636 / 0.38126884
=1.3553

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 - (1713.412 + 2432.933) / 5430.591) / (1 - (3748.186 + 3337.545) / 8679.954)
=0.23648365 / 0.18366722
=1.2876

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
=3688.72 / 4711.567
=0.7829

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))
=0.17192205 / 0.21660767
=0.7937

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)
=0.4606091 / 0.41212892
=1.1176

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)
=0.45008048 / 0.91973091
=0.4894

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
=(-1957.698 - -208.821 - -628.716) / 5430.591
=-0.2063

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.


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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99791.00441.05650.8011.31071.00770.90610.92130.92430.9957
GMI 0.98040.971.00171.00751.04230.96050.99151.04451.12511.3553
AQI 0.74381.3731.03530.9060.83920.97241.25661.25260.71881.2876
SGI 1.3641.35831.39011.29521.02941.27451.20240.85270.82040.7829
DEPI 1.29720.97980.8830.80151.19170.94010.99661.01660.90370.7937
SGAI 1.02081.05370.99371.00330.99821.05861.00361.08491.09191.1176
LVGI 0.96060.82661.05051.03011.07650.92351.1661.0921.29990.4894
TATA -0.0486-0.0567-0.0538-0.0599-0.0791-0.0712-0.0695-0.1123-0.1522-0.2063
M-score -2.46-2.24-2.35-2.75-2.58-2.59-2.67-3.13-3.59-3.22
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