Switch to:
National Oilwell Varco Inc (NYSE:NOV)
Beneish M-Score
-2.78 (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 -2.78 suggests that the company is not a manipulator.

NOV' s 10-Year Beneish M-Score Range
Min: -3.35   Max: 1.68
Current: -2.78

-3.35
1.68

During the past 13 years, the highest Beneish M-Score of National Oilwell Varco Inc was 1.68. The lowest was -3.35. And the median was -2.19.


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 * 0.5589+0.528 * 1.0479+0.404 * 0.9539+0.892 * 1.2451+0.115 * 0.9243
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.941+4.679 * -0.0251-0.327 * 1.0248
=-2.78

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $4,482 Mil.
Revenue was 5587 + 5255 + 5777 + 8950 = $25,569 Mil.
Gross Profit was 1528 + 1455 + 1396 + 1789 = $6,168 Mil.
Total Current Assets was $16,670 Mil.
Total Assets was $34,270 Mil.
Property, Plant and Equipment(Net PPE) was $3,377 Mil.
Depreciation, Depletion and Amortization(DDA) was $791 Mil.
Selling, General & Admin. Expense(SGA) was $2,273 Mil.
Total Current Liabilities was $7,201 Mil.
Long-Term Debt was $2,995 Mil.
Net Income was 699 + 619 + 589 + 658 = $2,565 Mil.
Non Operating Income was 18 + 2 + 10 + -1 = $29 Mil.
Cash Flow from Operations was 519 + 871 + 488 + 1518 = $3,396 Mil.
Accounts Receivable was $6,441 Mil.
Revenue was 4863 + 4680 + 5307 + 5685 = $20,535 Mil.
Gross Profit was 1360 + 1173 + 1264 + 1394 = $5,191 Mil.
Total Current Assets was $16,255 Mil.
Total Assets was $34,673 Mil.
Property, Plant and Equipment(Net PPE) was $3,333 Mil.
Depreciation, Depletion and Amortization(DDA) was $709 Mil.
Selling, General & Admin. Expense(SGA) was $1,940 Mil.
Total Current Liabilities was $6,317 Mil.
Long-Term Debt was $3,749 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)
=(4482 / 25569) / (6441 / 20535)
=0.17529039 / 0.31365961
=0.5589

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)
=(1455 / 20535) / (1528 / 25569)
=0.25278792 / 0.24122961
=1.0479

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 - (16670 + 3377) / 34270) / (1 - (16255 + 3333) / 34673)
=0.41502772 / 0.43506475
=0.9539

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
=25569 / 20535
=1.2451

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))
=(709 / (709 + 3333)) / (791 / (791 + 3377))
=0.17540821 / 0.18977927
=0.9243

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)
=(2273 / 25569) / (1940 / 20535)
=0.08889671 / 0.09447285
=0.941

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)
=((2995 + 7201) / 34270) / ((3749 + 6317) / 34673)
=0.2975197 / 0.29031235
=1.0248

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
=(2565 - 29 - 3396) / 34270
=-0.0251

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 -2.78 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.90091.18431.11621.02360.83310.24931.15173.34881.23230.7738
GMI 1.08121.00750.84820.86670.95381.01830.94431.02751.15161.1099
AQI 0.93521.35270.80090.81621.72160.99290.98750.92750.9511.0535
SGI 1.15622.00361.51271.39331.37210.94640.95631.20581.36721.1411
DEPI 0.91361.27370.85060.89520.7850.91730.97521.16771.05260.9691
SGAI 0.9290.72890.8860.8791.07031.21041.09560.93410.83551.016
LVGI 0.94880.68431.28121.01350.76870.77580.93410.99731.27881.0103
TATA -0.02070.0359-0.05470.0138-0.019-0.02610.006-0.00610.0598-0.0314
M-score -2.49-0.92-2.42-2.18-2.08-3.31-2.38-0.15-1.66-2.64

National Oilwell Varco Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.25220.24971.23231.26653.76755.48240.74350.82050.84550.5589
GMI 1.05871.10891.15181.19451.18721.10911.13481.0761.02621.0479
AQI 0.9750.98940.9511.1011.03661.0241.05350.9140.94210.9539
SGI 1.32661.37171.36721.33071.23221.10311.18761.15321.18361.2451
DEPI 1.20911.22391.05261.08431.02281.00630.96910.91770.94460.9243
SGAI 0.8430.83120.8350.90330.96091.02420.99520.96870.96350.941
LVGI 1.19041.11741.27881.38321.21521.21371.01030.97941.02611.0248
TATA 0.04860.06820.05980.03610.0152-0.0102-0.0314-0.0282-0.0413-0.0251
M-score -2.64-2.45-1.66-1.730.401.68-2.61-2.63-2.67-2.78
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)
Free 7-day Trial
FEEDBACK