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National Oilwell Varco Inc (NYSE:NOV)
Beneish M-Score
-2.72 (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 -2.72 suggests that the company is not a manipulator.

NOV' s 10-Year Beneish M-Score Range
Min: -3.08   Max: -0.71
Current: -2.72

-3.08
-0.71

During the past 13 years, the highest Beneish M-Score of National Oilwell Varco Inc was -0.71. The lowest was -3.08. And the median was -2.23.


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 * 0.9135+0.528 * 0.9807+0.404 * 0.9421+0.892 * 1.0954+0.115 * 0.9446
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0053+4.679 * -0.0412-0.327 * 1.0261
=-2.72

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $4,427 Mil.
Revenue was 5255 + 5777 + 6172 + 5789 = $22,993 Mil.
Gross Profit was 1455 + 1396 + 1497 + 1462 = $5,810 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 $780 Mil.
Selling, General & Admin. Expense(SGA) was $2,133 Mil.
Total Current Liabilities was $6,915 Mil.
Long-Term Debt was $3,148 Mil.
Net Income was 619 + 589 + 658 + 636 = $2,502 Mil.
Non Operating Income was 2 + 10 + -1 + -3 = $8 Mil.
Cash Flow from Operations was 871 + 488 + 1518 + 1009 = $3,886 Mil.
Accounts Receivable was $4,424 Mil.
Revenue was 4680 + 5307 + 5685 + 5319 = $20,991 Mil.
Gross Profit was 1173 + 1264 + 1394 + 1371 = $5,202 Mil.
Total Current Assets was $15,221 Mil.
Total Assets was $33,593 Mil.
Property, Plant and Equipment(Net PPE) was $3,210 Mil.
Depreciation, Depletion and Amortization(DDA) was $679 Mil.
Selling, General & Admin. Expense(SGA) was $1,937 Mil.
Total Current Liabilities was $5,619 Mil.
Long-Term Debt was $4,120 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)
=(4427 / 22993) / (4424 / 20991)
=0.19253686 / 0.21075699
=0.9135

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)
=(1396 / 20991) / (1455 / 22993)
=0.24782049 / 0.2526856
=0.9807

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 - (16003 + 3440) / 33827) / (1 - (15221 + 3210) / 33593)
=0.42522246 / 0.45134403
=0.9421

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
=22993 / 20991
=1.0954

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))
=(679 / (679 + 3210)) / (780 / (780 + 3440))
=0.17459501 / 0.18483412
=0.9446

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)
=(2133 / 22993) / (1937 / 20991)
=0.09276736 / 0.09227764
=1.0053

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)
=((3148 + 6915) / 33827) / ((4120 + 5619) / 33593)
=0.29748426 / 0.28991159
=1.0261

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
=(2502 - 8 - 3886) / 33827
=-0.0412

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 -2.72 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 1.32591.04620.85851.02360.83310.98621.15760.84241.23230.7738
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 -2.10-1.05-2.66-2.18-2.08-2.63-2.38-2.45-1.66-2.64

National Oilwell Varco Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.93711.02130.94571.23231.26650.93021.38530.80620.88820.9135
GMI 1.03481.05871.10891.15181.19451.18721.13681.08341.02810.9807
AQI 0.91130.9750.98940.9511.1011.03661.0241.05350.9140.9421
SGI 1.28891.32661.37171.36721.33071.23221.15291.09521.06521.0954
DEPI 1.18261.20911.22391.05261.08431.02280.99240.96910.91770.9446
SGAI 0.86180.8430.83120.8350.90330.96091.00021.04031.01121.0053
LVGI 1.0631.19041.11741.27881.38321.21521.21371.01030.97941.0261
TATA 0.00290.04860.06820.05980.03610.0152-0.0101-0.0313-0.0281-0.0412
M-score -2.26-1.93-1.81-1.66-1.73-2.21-2.03-2.67-2.68-2.72
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