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NorthWestern Corp (NYSE:NWE)
Beneish M-Score
-2.48 (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 -2.48 suggests that the company is not a manipulator.

NWE' s 10-Year Beneish M-Score Range
Min: -5.27   Max: 4.63
Current: -2.48

-5.27
4.63

During the past 13 years, the highest Beneish M-Score of NorthWestern Corp was 4.63. The lowest was -5.27. And the median was -2.62.


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 * 0.9981+0.528 * 1.1033+0.404 * 0.913+0.892 * 1.1207+0.115 * 1.0187
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8872+4.679 * -0.0271-0.327 * 1.0692
=-2.48

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $130 Mil.
Revenue was 270.281 + 369.723 + 319.09 + 262.248 = $1,221 Mil.
Gross Profit was 157.807 + 202.295 + 182.951 + 157.95 = $701 Mil.
Total Current Assets was $291 Mil.
Total Assets was $3,792 Mil.
Property, Plant and Equipment(Net PPE) was $2,748 Mil.
Depreciation, Depletion and Amortization(DDA) was $117 Mil.
Selling, General & Admin. Expense(SGA) was $296 Mil.
Total Current Liabilities was $431 Mil.
Long-Term Debt was $1,211 Mil.
Net Income was 7.746 + 45.58 + 26.093 + 15.647 = $95 Mil.
Non Operating Income was 2.98 + 2.189 + 0.977 + 3.117 = $9 Mil.
Cash Flow from Operations was 12.327 + 112.235 + 22.378 + 41.527 = $188 Mil.
Accounts Receivable was $117 Mil.
Revenue was 260.161 + 313.02 + 280.773 + 235.866 = $1,090 Mil.
Gross Profit was 153.248 + 180.824 + 213.223 + 142.805 = $690 Mil.
Total Current Assets was $246 Mil.
Total Assets was $3,551 Mil.
Property, Plant and Equipment(Net PPE) was $2,532 Mil.
Depreciation, Depletion and Amortization(DDA) was $110 Mil.
Selling, General & Admin. Expense(SGA) was $298 Mil.
Total Current Liabilities was $352 Mil.
Long-Term Debt was $1,086 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)
=(130.342 / 1221.342) / (116.526 / 1089.82)
=0.10672031 / 0.10692224
=0.9981

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)
=(202.295 / 1089.82) / (157.807 / 1221.342)
=0.63322384 / 0.57396127
=1.1033

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 - (290.657 + 2747.877) / 3791.777) / (1 - (246.081 + 2532.359) / 3551.048)
=0.19865171 / 0.21757183
=0.913

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
=1221.342 / 1089.82
=1.1207

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))
=(109.817 / (109.817 + 2532.359)) / (116.886 / (116.886 + 2747.877))
=0.04156309 / 0.04080128
=1.0187

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)
=(295.817 / 1221.342) / (297.537 / 1089.82)
=0.24220652 / 0.27301481
=0.8872

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)
=((1211.141 + 430.907) / 3791.777) / ((1085.824 + 352.483) / 3551.048)
=0.433055 / 0.40503733
=1.0692

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
=(95.066 - 9.263 - 188.467) / 3791.777
=-0.0271

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 -2.48 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 6.62470.2010.95840.90411.03271.01961.02481.02081.01941.1285
GMI 111112.00960.95350.93630.88391.0785
AQI 1.0680.99220.93960.73711.12740.91881.00221.08480.9730.8846
SGI 0.20055.66030.97161.05951.05060.90570.97271.00590.9581.0786
DEPI 6.40310.16621.06161.05231.04291.08231.04420.95221.04531.0365
SGAI 0.58381.1081.09630.87060.97161.19910.99221.12041.14880.9005
LVGI 0.97260.93141.0091.05951.01251.02930.9820.95561.00051.007
TATA 0.0096-0.045-0.0589-0.0594-0.0479-0.0164-0.0487-0.0452-0.0451-0.0289
M-score 2.760.64-2.86-2.89-2.57-2.16-2.72-2.68-2.80-2.41

NorthWestern Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.9311.00351.07241.01941.10361.12291.13431.12851.05940.9981
GMI 0.940.93160.94370.88390.88960.91170.9161.07851.1091.1033
AQI 1.09621.08681.04310.9730.9860.96851.01240.88460.87580.913
SGI 0.97610.96290.95290.9580.98721.00821.04051.07861.12751.1207
DEPI 0.96950.9861.00591.04531.02621.04991.04171.03651.05521.0187
SGAI 1.10451.0561.11731.14881.13481.12250.95880.90050.86170.8872
LVGI 0.95120.94720.95571.00050.99890.98030.97121.0071.01771.0692
TATA -0.0447-0.0394-0.0535-0.0451-0.0417-0.0379-0.0224-0.0289-0.0266-0.0271
M-score -2.77-2.69-2.72-2.80-2.67-2.61-2.44-2.41-2.40-2.48
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