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NorthWestern Corp (NYSE:NWE)
Beneish M-Score
-2.55 (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 -2.55 suggests that the company is not a manipulator.

NWE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.74   Max: 9.92
Current: -2.55

-4.74
9.92

During the past 13 years, the highest Beneish M-Score of NorthWestern Corp was 9.92. The lowest was -4.74. And the median was -2.61.


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 * 0.9554+0.528 * 1.0138+0.404 * 1.0542+0.892 * 1.0411+0.115 * 0.9284
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9072+4.679 * -0.0253-0.327 * 0.9634
=-2.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $117 Mil.
Revenue was 300.998 + 293.12 + 332.539 + 324.989 = $1,252 Mil.
Gross Profit was 204.842 + 211.427 + 217.105 + 217.62 = $851 Mil.
Total Current Assets was $238 Mil.
Total Assets was $5,394 Mil.
Property, Plant and Equipment(Net PPE) was $4,162 Mil.
Depreciation, Depletion and Amortization(DDA) was $157 Mil.
Selling, General & Admin. Expense(SGA) was $296 Mil.
Total Current Liabilities was $547 Mil.
Long-Term Debt was $1,819 Mil.
Net Income was 44.605 + 35.569 + 38.054 + 45.013 = $163 Mil.
Non Operating Income was -0.121 + 1.195 + 3.102 + 2.154 = $6 Mil.
Cash Flow from Operations was 116.994 + -1.142 + 142.136 + 35.341 = $293 Mil.
Accounts Receivable was $117 Mil.
Revenue was 272.739 + 270.56 + 346.011 + 312.947 = $1,202 Mil.
Gross Profit was 199.162 + 191.033 + 233.62 + 204.85 = $829 Mil.
Total Current Assets was $316 Mil.
Total Assets was $5,235 Mil.
Property, Plant and Equipment(Net PPE) was $4,005 Mil.
Depreciation, Depletion and Amortization(DDA) was $140 Mil.
Selling, General & Admin. Expense(SGA) was $313 Mil.
Total Current Liabilities was $575 Mil.
Long-Term Debt was $1,809 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)
=(116.821 / 1251.646) / (117.454 / 1202.257)
=0.0933339 / 0.09769459
=0.9554

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)
=(828.665 / 1202.257) / (850.994 / 1251.646)
=0.68925779 / 0.67989991
=1.0138

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 - (238.339 + 4161.993) / 5393.941) / (1 - (315.836 + 4004.516) / 5235.078)
=0.18420836 / 0.17473016
=1.0542

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
=1251.646 / 1202.257
=1.0411

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))
=(139.876 / (139.876 + 4004.516)) / (157.014 / (157.014 + 4161.993))
=0.03375067 / 0.03635419
=0.9284

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)
=(296.066 / 1251.646) / (313.468 / 1202.257)
=0.23654132 / 0.26073294
=0.9072

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)
=((1819.378 + 546.814) / 5393.941) / ((1808.925 + 574.913) / 5235.078)
=0.43867591 / 0.45535864
=0.9634

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
=(163.241 - 6.33 - 293.329) / 5393.941
=-0.0253

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 -2.55 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 local exchange's currency.

NorthWestern Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.95840.90411.03271.01961.02481.02081.01941.12850.89560.9372
GMI 112.24320.89590.95350.93630.88391.07850.97530.8651
AQI 0.93960.73711.12740.91881.00221.08480.9730.88460.91761.0032
SGI 0.97161.05951.05060.90570.97271.00590.9581.07861.04361.0078
DEPI 1.06161.05231.10751.01921.04420.95221.04531.03651.26240.9264
SGAI 1.09630.87060.97161.19910.99221.12041.05490.98071.02640.9649
LVGI 1.0091.05951.01251.02930.9820.95561.00051.0071.04430.9697
TATA -0.0591-0.0594-0.0479-0.0164-0.0487-0.0452-0.0451-0.0289-0.0281-0.0373
M-score -2.86-2.89-1.91-2.75-2.72-2.68-2.79-2.43-2.70-2.77

NorthWestern Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.99810.86120.89560.89180.97470.98010.93720.8920.91030.9554
GMI 1.10331.09250.97530.90120.86180.83910.86510.92880.96391.0138
AQI 0.9130.90730.91760.91950.90.89781.00321.00331.01151.0542
SGI 1.12071.08491.04360.97520.96730.99281.00781.01671.03551.0411
DEPI 1.01871.0151.26241.22181.20551.21070.92640.93730.94330.9284
SGAI 0.96510.94911.02641.11821.05641.08360.96490.92520.9810.9072
LVGI 1.06921.06291.04431.04751.02651.03550.96970.98140.98320.9634
TATA -0.0271-0.0319-0.0281-0.0294-0.0341-0.0415-0.0373-0.0432-0.0298-0.0253
M-score -2.50-2.68-2.70-2.83-2.80-2.83-2.77-2.79-2.68-2.55
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