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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-4.46 (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.

Penn National Gaming Inc has a M-score of -4.46 suggests that the company is not a manipulator.

PENN' s 10-Year Beneish M-Score Range
Min: -6.8   Max: -0.5
Current: -4.46

-6.8
-0.5

During the past 13 years, the highest Beneish M-Score of Penn National Gaming Inc was -0.50. The lowest was -6.80. 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 Penn National Gaming Inc 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 * 1.5074+0.528 * 0.9899+0.404 * 1.2286+0.892 * 0.881+0.115 * 0.3321
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.538+4.679 * -0.4689-0.327 * 1.2039
=-4.46

* 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 $70 Mil.
Revenue was 652.146 + 641.08 + 644.702 + 714.435 = $2,652 Mil.
Gross Profit was 287.636 + 277.465 + 273.94 + 304.388 = $1,143 Mil.
Total Current Assets was $497 Mil.
Total Assets was $2,254 Mil.
Property, Plant and Equipment(Net PPE) was $557 Mil.
Depreciation, Depletion and Amortization(DDA) was $235 Mil.
Selling, General & Admin. Expense(SGA) was $756 Mil.
Total Current Liabilities was $396 Mil.
Long-Term Debt was $1,028 Mil.
Net Income was 4.176 + 4.537 + -888.747 + 41.317 = $-839 Mil.
Non Operating Income was -0.35 + 4.114 + -58.668 + 1.86 = $-53 Mil.
Cash Flow from Operations was 98.265 + 23.608 + 12.844 + 136.528 = $271 Mil.
Accounts Receivable was $52 Mil.
Revenue was 761.371 + 798.246 + 743.811 + 707.044 = $3,010 Mil.
Gross Profit was 330.572 + 345.963 + 309.492 + 298.68 = $1,285 Mil.
Total Current Assets was $401 Mil.
Total Assets was $5,433 Mil.
Property, Plant and Equipment(Net PPE) was $2,678 Mil.
Depreciation, Depletion and Amortization(DDA) was $293 Mil.
Selling, General & Admin. Expense(SGA) was $558 Mil.
Total Current Liabilities was $457 Mil.
Long-Term Debt was $2,394 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)
=(69.521 / 2652.363) / (52.345 / 3010.472)
=0.02621097 / 0.01738764
=1.5074

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)
=(277.465 / 3010.472) / (287.636 / 2652.363)
=0.42674604 / 0.43109823
=0.9899

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 - (497.101 + 557.044) / 2253.858) / (1 - (401.282 + 2678.003) / 5433.37)
=0.53229307 / 0.43326425
=1.2286

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
=2652.363 / 3010.472
=0.881

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))
=(292.906 / (292.906 + 2678.003)) / (235.189 / (235.189 + 557.044))
=0.09859137 / 0.29686847
=0.3321

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)
=(756.236 / 2652.363) / (558.071 / 3010.472)
=0.28511784 / 0.18537658
=1.538

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)
=((1027.976 + 395.68) / 2253.858) / ((2393.606 + 457.048) / 5433.37)
=0.63165293 / 0.5246567
=1.2039

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
=(-838.717 - -53.044 - 271.245) / 2253.858
=-0.4689

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.

Penn National Gaming Inc has a M-score of -4.46 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.

Penn National Gaming Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.47011.95490.93530.3540.77661.88150.53441.14010.89880.9715
GMI 0.97111.02030.88811.04681.03291.03410.98280.98860.97760.973
AQI 1.25691.27050.90270.98480.79480.8631.10750.91271.03491.2544
SGI 0.98081.23831.66481.03630.99440.97781.03791.11511.05731.0067
DEPI 0.84411.55150.76251.03580.93820.96930.98141.14751.03080.2199
SGAI 0.8980.86271.36650.85851.10590.97970.98640.87861.20971.1277
LVGI 0.79531.18090.9570.95710.79261.05540.98730.9381.05971.1365
TATA -0.07390.0087-0.0074-0.0523-0.1492-0.127-0.1193-0.0681-0.0527-0.5435
M-score -2.26-1.20-2.16-3.23-3.41-2.34-3.39-2.55-2.82-5.11

Penn National Gaming Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.20650.94151.26550.89880.97180.91990.71280.97151.00171.5074
GMI 0.99561.00120.99390.97760.97020.9610.96640.9730.98310.9899
AQI 0.90421.00290.97011.03491.05071.04371.06511.25441.21451.2286
SGI 1.10951.0811.05051.05731.05351.06151.06561.00670.93240.881
DEPI 1.18051.10851.06611.03080.91750.82480.78480.21990.27570.3321
SGAI 0.89110.94581.00791.2021.21461.21541.12221.1351.33251.538
LVGI 0.94620.96621.01321.05971.05181.02720.99671.13651.17821.2039
TATA -0.067-0.0509-0.0451-0.0527-0.0582-0.0839-0.0915-0.5435-0.5055-0.4689
M-score -2.49-2.67-2.42-2.82-2.79-2.96-3.15-5.11-5.02-4.46
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