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National Oilwell Varco Inc (NYSE:NOV)
Beneish M-Score
-2.94 (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 -2.94 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: -2.94

-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 * 1.1845+0.528 * 1.8912+0.404 * 1.0747+0.892 * 0.4964+0.115 * 1.0711
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4539+4.679 * -0.1416-0.327 * 0.8304
=-2.94

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2,044 Mil.
Revenue was 1724 + 2189 + 2722 + 3306 = $9,941 Mil.
Gross Profit was 35 + 244 + 388 + 672 = $1,339 Mil.
Total Current Assets was $9,204 Mil.
Total Assets was $23,784 Mil.
Property, Plant and Equipment(Net PPE) was $3,277 Mil.
Depreciation, Depletion and Amortization(DDA) was $720 Mil.
Selling, General & Admin. Expense(SGA) was $1,507 Mil.
Total Current Liabilities was $2,947 Mil.
Long-Term Debt was $3,268 Mil.
Net Income was -217 + -119 + -1523 + 155 = $-1,704 Mil.
Non Operating Income was -41 + -27 + -20 + -20 = $-108 Mil.
Cash Flow from Operations was 128 + 621 + 614 + 410 = $1,773 Mil.
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.



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)
=(2044 / 9941) / (3476 / 20025)
=0.20561312 / 0.17358302
=1.1845

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)
=(5101 / 20025) / (1339 / 9941)
=0.25473159 / 0.1346947
=1.8912

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 - (9204 + 3277) / 23784) / (1 - (14167 + 3250) / 31225)
=0.47523545 / 0.44220977
=1.0747

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
=9941 / 20025
=0.4964

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 + 3250)) / (720 / (720 + 3277))
=0.1929476 / 0.1801351
=1.0711

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)
=(1507 / 9941) / (2088 / 20025)
=0.15159441 / 0.10426966
=1.4539

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)
=((3268 + 2947) / 23784) / ((4154 + 5672) / 31225)
=0.26131012 / 0.31468375
=0.8304

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
=(-1704 - -108 - 1773) / 23784
=-0.1416

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 -2.94 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 0.85851.02360.16421.26513.42691.32830.94821.01380.80860.9627
GMI 0.84820.86670.95361.01850.94431.02751.0461.10450.98011.3054
AQI 0.80090.81621.72160.99290.98750.92750.9511.05350.9721.0556
SGI 1.51271.39331.37210.94650.95631.20581.1731.11791.11540.6883
DEPI 0.85060.89520.78450.91790.97521.16771.06950.97180.94720.9738
SGAI 0.8860.8791.07031.21041.09560.93410.90391.03030.98451.2251
LVGI 1.28121.01350.76860.82810.87520.99731.27881.01031.09650.9885
TATA -0.05560.0138-0.0189-0.02610.006-0.00610.0597-0.0314-0.0024-0.0745
M-score -2.66-2.18-2.70-2.39-0.27-2.01-2.16-2.44-2.62-3.00

National Oilwell Varco Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.87250.8940.78510.84780.69980.79630.87940.96270.96881.1845
GMI 1.04540.99681.02530.95170.99291.06491.12821.29421.49831.8912
AQI 0.9140.94210.95390.9721.02621.03991.10381.05561.07391.0747
SGI 1.08441.11931.18911.06391.0830.9860.84360.68830.56740.4964
DEPI 0.92420.94770.92760.94720.92560.94090.94940.97381.07261.0711
SGAI 0.9980.98970.95981.01391.06321.05671.10681.24221.28941.4539
LVGI 0.97941.02611.02481.09651.14911.05781.04070.98850.82860.8304
TATA -0.0283-0.0413-0.0252-0.00240.00220.01420.0016-0.0745-0.1191-0.1416
M-score -2.67-2.70-2.64-2.65-2.73-2.60-2.65-3.00-3.14-2.94
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