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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: 9.83
Current: -2.79

-4.74
9.83

During the past 13 years, the highest Beneish M-Score of NorthWestern Corp was 9.83. The lowest was -4.74. And the median was -2.49.


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 0.95841.01961.02481.02081.01941.12850.89560.9372
GMI 12.00960.95350.93630.88391.07850.97530.8651
AQI 0.93960.91881.00221.08480.9730.88460.91761.0157
SGI 0.97160.90570.97271.00590.9581.07861.04361.0078
DEPI 1.06161.08231.04420.95221.04531.03651.26240.9264
SGAI 1.09631.19910.99221.12041.14880.90051.02640.9649
LVGI 1.0091.02930.9820.95561.00051.0071.04430.9729
TATA -0.0591-0.0164-0.0487-0.0452-0.0451-0.0289-0.0281-0.0372
M-score -2.86-2.16-2.72-2.68-2.80-2.41-2.70-2.76

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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