Switch to:
NorthWestern Corp (NYSE:NWE)
Beneish M-Score
-2.83 (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 -2.83 suggests that the company is not a manipulator.

NWE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.75   Max: 6.61
Current: -2.83

-4.75
6.61

During the past 13 years, the highest Beneish M-Score of NorthWestern Corp was 6.61. The lowest was -4.75. And the median was -2.59.


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 * 0.9801+0.528 * 0.8391+0.404 * 0.8978+0.892 * 0.9928+0.115 * 1.2107
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0836+4.679 * -0.0415-0.327 * 1.0355
=-2.83

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 23.798 + 30.973 + 51.425 + 37.169 = $143 Mil.
Non Operating Income was 3.769 + 0.995 + 0.665 + 5.468 = $11 Mil.
Cash Flow from Operations was 114.139 + 63.537 + 126.801 + 45.073 = $350 Mil.
Accounts Receivable was $121 Mil.
Revenue was 251.912 + 270.281 + 369.723 + 319.09 = $1,211 Mil.
Gross Profit was 157.32 + 157.807 + 202.295 + 182.951 = $700 Mil.
Total Current Assets was $320 Mil.
Total Assets was $3,874 Mil.
Property, Plant and Equipment(Net PPE) was $2,800 Mil.
Depreciation, Depletion and Amortization(DDA) was $119 Mil.
Selling, General & Admin. Expense(SGA) was $291 Mil.
Total Current Liabilities was $493 Mil.
Long-Term Debt was $1,211 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)
=(117.454 / 1202.257) / (120.713 / 1211.006)
=0.09769459 / 0.09967994
=0.9801

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)
=(191.033 / 1211.006) / (199.162 / 1202.257)
=0.57833983 / 0.68925779
=0.8391

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 - (315.836 + 4004.516) / 5235.078) / (1 - (320.48 + 2799.823) / 3874.298)
=0.17473016 / 0.19461461
=0.8978

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
=1202.257 / 1211.006
=0.9928

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))
=(119.285 / (119.285 + 2799.823)) / (139.876 / (139.876 + 4004.516))
=0.04086351 / 0.03375067
=1.2107

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)
=(313.468 / 1202.257) / (291.385 / 1211.006)
=0.26073294 / 0.240614
=1.0836

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)
=((1808.925 + 574.913) / 5235.078) / ((1210.697 + 493.07) / 3874.298)
=0.45535864 / 0.43976147
=1.0355

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
=(143.365 - 10.897 - 349.55) / 5235.078
=-0.0415

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 -2.83 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.2010.95840.90411.03271.01961.02481.02081.01941.12850.8956
GMI 1112.24320.89590.95350.93630.88391.07850.9753
AQI 1.01150.93960.73711.12740.91881.00221.08480.9730.88460.9176
SGI 5.66030.97161.05951.05060.90570.97271.00590.9581.07861.0436
DEPI 0.16711.06161.05231.10751.01921.04420.95221.04531.03651.2624
SGAI 1.1081.09630.87060.97161.19910.99221.12041.14880.90051.0264
LVGI 0.93291.0091.05951.01251.02930.9820.95561.00051.0071.0443
TATA -0.0611-0.0589-0.0594-0.0479-0.0164-0.0487-0.0452-0.0451-0.0289-0.0281
M-score 0.57-2.86-2.89-1.91-2.75-2.72-2.68-2.80-2.41-2.70

NorthWestern Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.12291.13431.12851.05940.99810.86120.89560.89180.97470.9801
GMI 0.91170.9161.07851.1091.10331.09250.97530.90120.86180.8391
AQI 0.96851.01240.88460.87580.9130.90730.91760.91950.90.8978
SGI 1.00821.04051.07861.12751.12071.08491.04360.97520.96730.9928
DEPI 1.04991.04171.03651.05521.01871.0151.26241.22181.20551.2107
SGAI 1.12251.13650.90050.86170.88720.87481.02641.11821.05641.0836
LVGI 0.98030.97121.0071.01771.06921.06291.04431.04751.02651.0355
TATA -0.0379-0.0224-0.0289-0.0266-0.0271-0.0319-0.0281-0.0294-0.0341-0.0415
M-score -2.61-2.47-2.41-2.40-2.48-2.67-2.70-2.83-2.80-2.83
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK