Switch to:
National Oilwell Varco Inc (NYSE:NOV)
Beneish M-Score
-3.14 (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.

National Oilwell Varco Inc has a M-score of -3.14 suggests that the company is not a manipulator.

NOV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.36   Max: 0.7
Current: -3.14

-3.36
0.7

During the past 13 years, the highest Beneish M-Score of National Oilwell Varco Inc was 0.70. The lowest was -3.36. And the median was -2.24.


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 National Oilwell Varco 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 * 0.9688+0.528 * 1.4983+0.404 * 1.0739+0.892 * 0.5674+0.115 * 1.0726
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2894+4.679 * -0.1191-0.327 * 0.8286
=-3.14

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,212 Mil.
Revenue was 2189 + 2722 + 3306 + 3909 = $12,126 Mil.
Gross Profit was 244 + 388 + 672 + 855 = $2,159 Mil.
Total Current Assets was $10,048 Mil.
Total Assets was $24,754 Mil.
Property, Plant and Equipment(Net PPE) was $3,303 Mil.
Depreciation, Depletion and Amortization(DDA) was $732 Mil.
Selling, General & Admin. Expense(SGA) was $1,619 Mil.
Total Current Liabilities was $3,435 Mil.
Long-Term Debt was $3,372 Mil.
Net Income was -119 + -1523 + 155 + 289 = $-1,198 Mil.
Non Operating Income was -27 + -20 + -20 + -23 = $-90 Mil.
Cash Flow from Operations was 621 + 614 + 410 + 194 = $1,839 Mil.
Accounts Receivable was $4,024 Mil.
Revenue was 4820 + 5709 + 5587 + 5255 = $21,371 Mil.
Gross Profit was 1177 + 1541 + 1528 + 1455 = $5,701 Mil.
Total Current Assets was $15,299 Mil.
Total Assets was $32,424 Mil.
Property, Plant and Equipment(Net PPE) was $3,216 Mil.
Depreciation, Depletion and Amortization(DDA) was $777 Mil.
Selling, General & Admin. Expense(SGA) was $2,213 Mil.
Total Current Liabilities was $6,667 Mil.
Long-Term Debt was $4,094 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)
=(2212 / 12126) / (4024 / 21371)
=0.18241794 / 0.18829255
=0.9688

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)
=(5701 / 21371) / (2159 / 12126)
=0.26676337 / 0.17804717
=1.4983

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 - (10048 + 3303) / 24754) / (1 - (15299 + 3216) / 32424)
=0.46065282 / 0.42897237
=1.0739

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
=12126 / 21371
=0.5674

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))
=(777 / (777 + 3216)) / (732 / (732 + 3303))
=0.19459053 / 0.18141264
=1.0726

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)
=(1619 / 12126) / (2213 / 21371)
=0.13351476 / 0.10355154
=1.2894

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)
=((3372 + 3435) / 24754) / ((4094 + 6667) / 32424)
=0.27498586 / 0.33188379
=0.8286

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
=(-1198 - -90 - 1839) / 24754
=-0.1191

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.

National Oilwell Varco Inc has a M-score of -3.14 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.

National Oilwell Varco Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.85851.02360.16421.26523.42691.32830.81350.99320.96210.9627
GMI 0.84820.86670.95381.01830.94431.02751.15161.10990.88591.3054
AQI 0.80090.81621.72160.99290.98750.92750.9511.05350.9721.0556
SGI 1.51271.39331.37210.94640.95631.20581.36721.14110.93750.6883
DEPI 0.85060.89520.78510.91710.97521.16771.05260.96910.96510.9738
SGAI 0.8860.8791.07031.21041.09560.93410.83551.0161.08011.2251
LVGI 1.28121.01350.76860.82810.87520.99731.27881.01031.09650.9885
TATA -0.05560.0138-0.019-0.02610.006-0.00610.0598-0.0314-0.0024-0.0745
M-score -2.66-2.18-2.70-2.39-0.27-2.01-2.04-2.44-2.70-3.00

National Oilwell Varco Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.9670.87250.8940.78510.84780.69980.79630.87940.96270.9688
GMI 1.13621.04540.99681.02530.95170.99291.06491.12821.29421.4983
AQI 1.05350.9140.94210.95390.9721.02621.03991.10381.05561.0739
SGI 1.1721.08441.11931.18911.06391.0830.9860.84360.68830.5674
DEPI 0.97180.92420.94770.92760.94720.92560.94090.94940.97381.0726
SGAI 1.00340.9980.98970.95981.01391.06321.05671.10681.24221.2894
LVGI 1.01030.97941.02611.02481.09651.14911.05781.04070.98850.8286
TATA -0.0315-0.0283-0.0413-0.0252-0.00240.00220.01420.0016-0.0745-0.1191
M-score -2.42-2.67-2.70-2.64-2.65-2.73-2.60-2.65-3.00-3.14
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK