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NorthWestern Corp (NYSE:NWE)
Beneish M-Score
-2.68 (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 -2.68 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: -2.68

-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 * 0.9103+0.528 * 0.9639+0.404 * 1.0115+0.892 * 1.0355+0.115 * 0.9433
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.981+4.679 * -0.0298-0.327 * 0.9832
=-2.68

* 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 $116 Mil.
Revenue was 293.12 + 332.539 + 324.989 + 272.739 = $1,223 Mil.
Gross Profit was 211.427 + 217.105 + 217.62 + 199.162 = $845 Mil.
Total Current Assets was $238 Mil.
Total Assets was $5,308 Mil.
Property, Plant and Equipment(Net PPE) was $4,110 Mil.
Depreciation, Depletion and Amortization(DDA) was $153 Mil.
Selling, General & Admin. Expense(SGA) was $307 Mil.
Total Current Liabilities was $521 Mil.
Long-Term Debt was $1,799 Mil.
Net Income was 35.569 + 38.054 + 45.013 + 23.798 = $142 Mil.
Non Operating Income was 1.195 + 3.102 + 2.154 + 3.769 = $10 Mil.
Cash Flow from Operations was -1.142 + 142.136 + 35.341 + 114.139 = $290 Mil.
Accounts Receivable was $123 Mil.
Revenue was 270.56 + 346.011 + 312.947 + 251.912 = $1,181 Mil.
Gross Profit was 191.033 + 233.62 + 204.85 + 157.32 = $787 Mil.
Total Current Assets was $312 Mil.
Total Assets was $5,060 Mil.
Property, Plant and Equipment(Net PPE) was $3,843 Mil.
Depreciation, Depletion and Amortization(DDA) was $135 Mil.
Selling, General & Admin. Expense(SGA) was $302 Mil.
Total Current Liabilities was $510 Mil.
Long-Term Debt was $1,739 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)
=(115.833 / 1223.387) / (122.888 / 1181.43)
=0.09468222 / 0.10401632
=0.9103

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)
=(786.823 / 1181.43) / (845.314 / 1223.387)
=0.66599206 / 0.69096206
=0.9639

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 - (237.991 + 4109.73) / 5307.606) / (1 - (312.165 + 3843.234) / 5060.068)
=0.18085084 / 0.17878594
=1.0115

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
=1223.387 / 1181.43
=1.0355

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))
=(134.635 / (134.635 + 3843.234)) / (152.944 / (152.944 + 4109.73))
=0.03384601 / 0.03587983
=0.9433

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)
=(307.072 / 1223.387) / (302.28 / 1181.43)
=0.25100152 / 0.25585942
=0.981

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)
=((1799.087 + 520.676) / 5307.606) / ((1739.389 + 510.022) / 5060.068)
=0.4370639 / 0.44454165
=0.9832

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
=(142.434 - 10.22 - 290.474) / 5307.606
=-0.0298

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 -2.68 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.05940.99810.86120.89560.89180.97470.98010.93720.8920.9103
GMI 1.1091.10331.09250.97530.90120.86180.83910.86510.92880.9639
AQI 0.87580.9130.90730.91760.91950.90.89781.01571.00331.0115
SGI 1.12751.12071.08491.04360.97520.96730.99281.00781.01671.0355
DEPI 1.05521.01871.0151.26241.22181.20551.21070.92640.93730.9433
SGAI 0.93750.96510.94911.02641.11821.05641.08360.96490.92520.981
LVGI 1.01771.06921.06291.04431.04751.02651.03550.97290.98140.9832
TATA -0.0266-0.0271-0.0319-0.0281-0.0294-0.0341-0.0415-0.0372-0.0432-0.0298
M-score -2.42-2.50-2.68-2.70-2.83-2.80-2.83-2.76-2.79-2.68
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