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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-3.32 (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 -3.32 suggests that the company is not a manipulator.

PENN' s Beneish M-Score Range Over the Past 10 Years
Min: -8.41   Max: -0.5
Current: -3.32

-8.41
-0.5

During the past 13 years, the highest Beneish M-Score of Penn National Gaming Inc was -0.50. The lowest was -8.41. And the median was -2.55.


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 * 0.9258+0.528 * 1.0204+0.404 * 1.0639+0.892 * 1.1265+0.115 * 1.0172
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8446+4.679 * -0.0683-0.327 * 2.9255
=-3.32

* 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 $47 Mil.
Revenue was 769.422 + 756.451 + 733.967 + 739.297 = $2,999 Mil.
Gross Profit was 328.348 + 323.055 + 305.004 + 315.927 = $1,272 Mil.
Total Current Assets was $343 Mil.
Total Assets was $5,143 Mil.
Property, Plant and Equipment(Net PPE) was $2,895 Mil.
Depreciation, Depletion and Amortization(DDA) was $266 Mil.
Selling, General & Admin. Expense(SGA) was $444 Mil.
Total Current Liabilities was $541 Mil.
Long-Term Debt was $5,052 Mil.
Net Income was 34.035 + 23.708 + -9.066 + 4.9 = $54 Mil.
Non Operating Income was 3.592 + 2.183 + 3.66 + 6.431 = $16 Mil.
Cash Flow from Operations was 118.33 + 71.333 + 92.837 + 106.453 = $389 Mil.
Accounts Receivable was $45 Mil.
Revenue was 700.956 + 664.138 + 651.361 + 645.94 = $2,662 Mil.
Gross Profit was 304.537 + 291.314 + 278.121 + 278.545 = $1,153 Mil.
Total Current Assets was $398 Mil.
Total Assets was $4,745 Mil.
Property, Plant and Equipment(Net PPE) was $2,695 Mil.
Depreciation, Depletion and Amortization(DDA) was $252 Mil.
Selling, General & Admin. Expense(SGA) was $466 Mil.
Total Current Liabilities was $542 Mil.
Long-Term Debt was $1,222 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)
=(47.069 / 2999.137) / (45.135 / 2662.395)
=0.01569418 / 0.01695278
=0.9258

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)
=(1152.517 / 2662.395) / (1272.334 / 2999.137)
=0.43288731 / 0.42423337
=1.0204

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 - (342.709 + 2894.742) / 5142.753) / (1 - (397.589 + 2694.942) / 4744.876)
=0.37048289 / 0.34823776
=1.0639

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
=2999.137 / 2662.395
=1.1265

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))
=(252.327 / (252.327 + 2694.942)) / (266.019 / (266.019 + 2894.742))
=0.08561383 / 0.08416296
=1.0172

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)
=(443.609 / 2999.137) / (466.283 / 2662.395)
=0.14791222 / 0.17513667
=0.8446

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)
=((5052.235 + 540.553) / 5142.753) / ((1221.95 + 541.894) / 4744.876)
=1.08750858 / 0.37173658
=2.9255

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
=(53.577 - 15.866 - 388.953) / 5142.753
=-0.0683

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 -3.32 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.69351.01160.77661.09540.91791.11840.9880.94660.84940.9909
GMI 0.98471.04681.04551.02150.98280.98860.97440.97640.99021.0126
AQI 0.90270.98480.79480.86731.1020.91271.03490.77121.05830.9907
SGI 1.62951.03630.99440.97781.03791.11510.98051.03310.93261.0957
DEPI 0.76251.03580.99570.91340.98141.14751.02260.74651.22561.1342
SGAI 1.00780.85851.07471.00820.96870.92361.21530.98950.92750.9188
LVGI 0.9570.95710.79261.05540.98730.9381.05970.57213.56370.9737
TATA 0.0134-0.0523-0.1492-0.127-0.1193-0.0681-0.0541-0.2218-0.0988-0.0815
M-score -2.20-2.62-3.39-3.08-3.04-2.58-2.81-3.53-3.92-2.74

Penn National Gaming Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.98051.48661.1450.84940.77210.61240.85770.99091.0250.9258
GMI 0.98470.99190.99050.99020.99090.99841.00451.01261.01991.0204
AQI 1.21451.22861.22311.05830.65120.65420.63410.99071.0461.0639
SGI 0.95260.8970.87030.93260.99731.06011.1281.09571.12131.1265
DEPI 0.25360.2850.38771.22564.06544.06793.49641.13421.07751.0172
SGAI 0.98330.96810.9780.92750.93490.94160.89670.91880.88120.8446
LVGI 1.17821.20391.29273.56370.5820.58850.62350.97372.97152.9255
TATA -0.4292-0.4039-0.3757-0.0988-0.1044-0.1045-0.0956-0.0815-0.0751-0.0683
M-score -4.61-4.07-4.30-3.92-2.83-2.92-2.66-2.74-3.29-3.32
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