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National Oilwell Varco Inc (NYSE:NOV)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

NOV' s 10-Year Beneish M-Score Range
Min: -3.36   Max: 1.68
Current: -2.6

-3.36
1.68

During the past 13 years, the highest Beneish M-Score of National Oilwell Varco Inc was 1.68. 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 * 0.7963+0.528 * 1.0649+0.404 * 1.0399+0.892 * 0.986+0.115 * 0.9409
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0567+4.679 * 0.0142-0.327 * 1.0578
=-2.60

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $3,476 Mil.
Revenue was 3909 + 4820 + 5709 + 5587 = $20,025 Mil.
Gross Profit was 855 + 1177 + 1541 + 1528 = $5,101 Mil.
Total Current Assets was $14,167 Mil.
Total Assets was $31,225 Mil.
Property, Plant and Equipment(Net PPE) was $3,250 Mil.
Depreciation, Depletion and Amortization(DDA) was $777 Mil.
Selling, General & Admin. Expense(SGA) was $2,088 Mil.
Total Current Liabilities was $5,672 Mil.
Long-Term Debt was $4,154 Mil.
Net Income was 289 + 310 + 595 + 699 = $1,893 Mil.
Non Operating Income was -23 + -47 + -62 + 18 = $-114 Mil.
Cash Flow from Operations was 194 + 114 + 736 + 519 = $1,563 Mil.
Accounts Receivable was $4,427 Mil.
Revenue was 5255 + 4889 + 5302 + 4863 = $20,309 Mil.
Gross Profit was 1455 + 1290 + 1404 + 1360 = $5,509 Mil.
Total Current Assets was $16,003 Mil.
Total Assets was $33,827 Mil.
Property, Plant and Equipment(Net PPE) was $3,440 Mil.
Depreciation, Depletion and Amortization(DDA) was $763 Mil.
Selling, General & Admin. Expense(SGA) was $2,004 Mil.
Total Current Liabilities was $6,915 Mil.
Long-Term Debt was $3,148 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)
=(3476 / 20025) / (4427 / 20309)
=0.17358302 / 0.21798218
=0.7963

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)
=(1177 / 20309) / (855 / 20025)
=0.27125905 / 0.25473159
=1.0649

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 - (14167 + 3250) / 31225) / (1 - (16003 + 3440) / 33827)
=0.44220977 / 0.42522246
=1.0399

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
=20025 / 20309
=0.986

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))
=(763 / (763 + 3440)) / (777 / (777 + 3250))
=0.181537 / 0.1929476
=0.9409

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)
=(2088 / 20025) / (2004 / 20309)
=0.10426966 / 0.09867546
=1.0567

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)
=((4154 + 5672) / 31225) / ((3148 + 6915) / 33827)
=0.31468375 / 0.29748426
=1.0578

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
=(1893 - -114 - 1563) / 31225
=0.0142

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 -2.60 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.53970.85851.02360.16421.26511.15173.95220.81351.18170.8086
GMI 1.02250.84820.86670.95361.01850.94431.02751.15161.00320.9801
AQI 1.34120.80090.81621.72160.99290.98750.92750.9511.05350.972
SGI 2.00361.51271.39331.37210.94650.95631.20581.36720.95911.1154
DEPI 1.27370.85060.89520.78450.91790.97521.16771.05260.98740.9472
SGAI 0.72890.8860.8791.07031.21041.09560.93410.83551.11460.9845
LVGI 0.67611.28121.01350.76860.82810.87520.99731.27881.01031.0965
TATA 0.0359-0.05470.0138-0.0189-0.02610.006-0.00610.0598-0.0314-0.0024
M-score -0.59-2.66-2.18-2.70-2.39-2.360.41-2.04-2.50-2.62

National Oilwell Varco Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.26653.76755.48241.12711.0091.03430.67940.84780.69980.7963
GMI 1.19451.18721.10911.0320.95710.91360.93660.95170.99291.0649
AQI 1.1011.03661.0241.05350.9140.94210.95390.9721.02621.0399
SGI 1.33071.23221.10311.00550.93770.96751.02431.06391.0830.986
DEPI 1.08431.02281.00630.98740.93850.96180.94070.94720.92560.9409
SGAI 0.90330.96091.02421.08551.07651.06931.04071.01391.06321.0567
LVGI 1.38321.21521.21371.01030.97941.02611.02481.09651.14911.0578
TATA 0.03610.0152-0.0102-0.0315-0.0283-0.0413-0.0252-0.00240.00220.0142
M-score -1.730.401.68-2.49-2.73-2.76-2.95-2.65-2.73-2.60
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