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NorthWestern Corp (NYSE:NWE)
Beneish M-Score
-2.79 (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.

NorthWestern Corp has a M-score of -2.79 suggests that the company is not a manipulator.

NWE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.74   Max: 9.91
Current: -2.79

-4.74
9.91

During the past 13 years, the highest Beneish M-Score of NorthWestern Corp was 9.91. The lowest was -4.74. And the median was -2.47.


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 NorthWestern Corp 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 * 0.892+0.528 * 0.9288+0.404 * 1.0033+0.892 * 1.0167+0.115 * 0.9373
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9252+4.679 * -0.0432-0.327 * 0.9814
=-2.79

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $135 Mil.
Revenue was 332.539 + 324.989 + 272.739 + 270.56 = $1,201 Mil.
Gross Profit was 217.105 + 217.62 + 199.162 + 191.033 = $825 Mil.
Total Current Assets was $250 Mil.
Total Assets was $5,261 Mil.
Property, Plant and Equipment(Net PPE) was $4,069 Mil.
Depreciation, Depletion and Amortization(DDA) was $149 Mil.
Selling, General & Admin. Expense(SGA) was $296 Mil.
Total Current Liabilities was $518 Mil.
Long-Term Debt was $1,794 Mil.
Net Income was 38.054 + 45.013 + 23.798 + 30.973 = $138 Mil.
Non Operating Income was 3.102 + 2.154 + 3.769 + 0.995 = $10 Mil.
Cash Flow from Operations was 142.136 + 35.341 + 114.139 + 63.537 = $355 Mil.
Accounts Receivable was $149 Mil.
Revenue was 346.011 + 312.947 + 251.912 + 270.281 = $1,181 Mil.
Gross Profit was 233.62 + 204.85 + 157.32 + 157.807 = $754 Mil.
Total Current Assets was $318 Mil.
Total Assets was $4,989 Mil.
Property, Plant and Equipment(Net PPE) was $3,781 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $315 Mil.
Total Current Liabilities was $545 Mil.
Long-Term Debt was $1,690 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)
=(134.983 / 1200.827) / (148.843 / 1181.151)
=0.11240837 / 0.12601522
=0.892

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)
=(217.62 / 1181.151) / (217.105 / 1200.827)
=0.63801919 / 0.6869599
=0.9288

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 - (250.476 + 4069.086) / 5261.173) / (1 - (317.943 + 3781.199) / 4989.091)
=0.17897359 / 0.17837899
=1.0033

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
=1200.827 / 1181.151
=1.0167

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))
=(129.277 / (129.277 + 3781.199)) / (148.773 / (148.773 + 4069.086))
=0.03305915 / 0.03527216
=0.9373

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)
=(296.213 / 1200.827) / (314.927 / 1181.151)
=0.24667417 / 0.26662721
=0.9252

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)
=((1794.242 + 518.197) / 5261.173) / ((1689.825 + 544.547) / 4989.091)
=0.43952917 / 0.44785152
=0.9814

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
=(137.838 - 10.02 - 355.153) / 5261.173
=-0.0432

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.

NorthWestern Corp has a M-score of -2.79 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.

NorthWestern Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.95840.90411.03271.01961.02481.02081.01941.12850.89560.9372
GMI 1112.00960.95350.93630.88391.07850.97530.8651
AQI 0.93960.73711.12740.91881.00221.08480.9730.88460.91761.0157
SGI 0.97161.05951.05060.90570.97271.00590.9581.07861.04361.0078
DEPI 1.06161.05231.04291.08231.04420.95221.04531.03651.26240.9264
SGAI 1.09630.87060.97161.19910.99221.12041.14880.90051.02640.9649
LVGI 1.0091.05951.01251.02930.9820.95561.00051.0071.04430.9729
TATA -0.0591-0.0594-0.0479-0.0164-0.0487-0.0452-0.0451-0.0289-0.0281-0.0372
M-score -2.86-2.89-2.57-2.16-2.72-2.68-2.80-2.41-2.70-2.76

NorthWestern Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.12851.05940.99810.86120.89560.89180.97470.98010.93720.892
GMI 1.07851.1091.10331.09250.97530.90120.86180.83910.86510.9288
AQI 0.88460.87580.9130.90730.91760.91950.90.89781.01571.0033
SGI 1.07861.12751.12071.08491.04360.97520.96730.99281.00781.0167
DEPI 1.03651.05521.01871.0151.26241.22181.20551.21070.92640.9373
SGAI 0.98070.93750.96510.94911.02641.11821.05641.08360.96490.9252
LVGI 1.0071.01771.06921.06291.04431.04751.02651.03550.97290.9814
TATA -0.0289-0.0266-0.0271-0.0319-0.0281-0.0294-0.0341-0.0415-0.0372-0.0432
M-score -2.43-2.42-2.50-2.68-2.70-2.83-2.80-2.83-2.76-2.79
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