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National Oilwell Varco Inc (NYSE:NOV)
Beneish M-Score
-3.01 (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 -3.01 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: -3.01

-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 -2.22.


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 * 1.0025+0.528 * 1.2654+0.404 * 1.0556+0.892 * 0.6609+0.115 * 0.9738
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2671+4.679 * -0.0745-0.327 * 0.9885
=-3.01

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $2,926 Mil.
Revenue was 2722 + 3306 + 3909 + 4820 = $14,757 Mil.
Gross Profit was 388 + 672 + 855 + 1177 = $3,092 Mil.
Total Current Assets was $11,801 Mil.
Total Assets was $26,725 Mil.
Property, Plant and Equipment(Net PPE) was $3,124 Mil.
Depreciation, Depletion and Amortization(DDA) was $747 Mil.
Selling, General & Admin. Expense(SGA) was $1,793 Mil.
Total Current Liabilities was $4,249 Mil.
Long-Term Debt was $3,928 Mil.
Net Income was -1523 + 155 + 289 + 310 = $-769 Mil.
Non Operating Income was -20 + -20 + -23 + -47 = $-110 Mil.
Cash Flow from Operations was 614 + 410 + 194 + 114 = $1,332 Mil.
Accounts Receivable was $4,416 Mil.
Revenue was 5709 + 5587 + 5255 + 5777 = $22,328 Mil.
Gross Profit was 1541 + 1528 + 1455 + 1396 = $5,920 Mil.
Total Current Assets was $16,162 Mil.
Total Assets was $33,562 Mil.
Property, Plant and Equipment(Net PPE) was $3,362 Mil.
Depreciation, Depletion and Amortization(DDA) was $778 Mil.
Selling, General & Admin. Expense(SGA) was $2,141 Mil.
Total Current Liabilities was $7,374 Mil.
Long-Term Debt was $3,014 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)
=(2926 / 14757) / (4416 / 22328)
=0.19827878 / 0.19777857
=1.0025

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)
=(672 / 22328) / (388 / 14757)
=0.26513794 / 0.20952768
=1.2654

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 - (11801 + 3124) / 26725) / (1 - (16162 + 3362) / 33562)
=0.44153414 / 0.41827066
=1.0556

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
=14757 / 22328
=0.6609

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))
=(778 / (778 + 3362)) / (747 / (747 + 3124))
=0.18792271 / 0.19297339
=0.9738

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)
=(1793 / 14757) / (2141 / 22328)
=0.12150166 / 0.09588857
=1.2671

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)
=((3928 + 4249) / 26725) / ((3014 + 7374) / 33562)
=0.30596819 / 0.30951672
=0.9885

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
=(-769 - -110 - 1332) / 26725
=-0.0745

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 -3.01 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 0.85851.02360.16421.26513.42691.32830.81350.99320.96210.9627
GMI 0.84820.86670.95361.01850.94431.02751.15161.10990.88591.3054
AQI 0.80090.81621.72160.99290.98750.92750.9511.05350.9721.0556
SGI 1.51271.39331.37210.94650.95631.20581.36721.14110.93750.6883
DEPI 0.85060.89520.78450.91790.97521.16771.05260.96910.96510.9738
SGAI 0.8860.8791.07031.21041.09560.93410.83551.0161.08011.2251
LVGI 1.28121.01350.76860.77580.93410.99731.27881.01031.09650.9885
TATA -0.05560.0138-0.0189-0.02610.006-0.00610.0598-0.0314-0.0024-0.0745
M-score -2.66-2.18-2.70-2.37-0.29-2.01-2.04-2.44-2.70-3.00

National Oilwell Varco Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.99320.85320.95360.68340.92380.82760.90160.95291.00250.9688
GMI 1.10971.05260.95630.93340.90530.90280.9921.07771.26541.4604
AQI 1.05350.9140.94210.95390.9721.02621.03991.10381.05561.1139
SGI 1.14111.1091.04931.01830.97630.91570.87090.77860.66090.5674
DEPI 0.96910.91770.96180.94880.96510.95050.94990.95440.97381.3429
SGAI 1.01660.98881.02971.05021.06141.15751.1241.14991.26711.2217
LVGI 1.01030.97941.02611.02481.09651.14911.05781.04070.98850.8022
TATA -0.0314-0.0282-0.0412-0.0251-0.00240.00220.01420.0016-0.0745-0.091
M-score -2.44-2.66-2.74-2.95-2.69-2.83-2.65-2.67-3.01-2.97
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