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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-3.29 (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 -3.29 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: -3.29

-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 -2.54.


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 * 1.025+0.528 * 1.0199+0.404 * 1.046+0.892 * 1.1213+0.115 * 1.0775
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8812+4.679 * -0.0751-0.327 * 2.9715
=-3.29

* 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 $47 Mil.
Revenue was 756.451 + 733.967 + 739.297 + 700.956 = $2,931 Mil.
Gross Profit was 323.055 + 305.004 + 315.927 + 304.537 = $1,249 Mil.
Total Current Assets was $340 Mil.
Total Assets was $5,129 Mil.
Property, Plant and Equipment(Net PPE) was $2,935 Mil.
Depreciation, Depletion and Amortization(DDA) was $262 Mil.
Selling, General & Admin. Expense(SGA) was $450 Mil.
Total Current Liabilities was $530 Mil.
Long-Term Debt was $5,097 Mil.
Net Income was 23.708 + -9.066 + 4.9 + 2.983 = $23 Mil.
Non Operating Income was 2.183 + 3.66 + 6.431 + 3.198 = $15 Mil.
Cash Flow from Operations was 71.333 + 92.837 + 106.453 + 121.656 = $392 Mil.
Accounts Receivable was $41 Mil.
Revenue was 664.138 + 651.361 + 645.94 + 652.146 = $2,614 Mil.
Gross Profit was 291.314 + 278.121 + 278.545 + 287.636 = $1,136 Mil.
Total Current Assets was $410 Mil.
Total Assets was $4,724 Mil.
Property, Plant and Equipment(Net PPE) was $2,683 Mil.
Depreciation, Depletion and Amortization(DDA) was $260 Mil.
Selling, General & Admin. Expense(SGA) was $455 Mil.
Total Current Liabilities was $504 Mil.
Long-Term Debt was $1,240 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)
=(47.029 / 2930.671) / (40.918 / 2613.585)
=0.01604718 / 0.01565589
=1.025

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)
=(1135.616 / 2613.585) / (1248.523 / 2930.671)
=0.4345051 / 0.4260195
=1.0199

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 - (340.42 + 2935.27) / 5128.688) / (1 - (409.887 + 2682.661) / 4724.485)
=0.36130059 / 0.34542114
=1.046

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
=2930.671 / 2613.585
=1.1213

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))
=(259.926 / (259.926 + 2682.661)) / (262.112 / (262.112 + 2935.27))
=0.08833248 / 0.08197707
=1.0775

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)
=(449.681 / 2930.671) / (455.117 / 2613.585)
=0.1534396 / 0.17413514
=0.8812

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)
=((5097.165 + 530.274) / 5128.688) / ((1240.459 + 504.119) / 4724.485)
=1.09724729 / 0.3692631
=2.9715

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
=(22.525 - 15.472 - 392.279) / 5128.688
=-0.0751

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 -3.29 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 0.67881.01160.77661.09540.91791.11840.91620.97150.89250.9909
GMI 0.88811.04681.03291.03410.98280.98860.97760.9730.99291.0101
AQI 0.90270.98480.79480.86731.1020.91271.03490.77121.05830.9907
SGI 1.66481.03630.99440.97781.03791.11511.05731.00670.88751.0957
DEPI 0.76251.03580.93820.96930.98141.14751.03080.77791.68660.7845
SGAI 1.36650.85851.10590.97970.98640.87861.20971.12771.64060.4727
LVGI 0.9570.95710.79261.05540.98730.9381.05970.57213.56370.9737
TATA 0.0134-0.0523-0.1492-0.127-0.1193-0.0681-0.0527-0.2657-0.1004-0.0815
M-score -2.29-2.62-3.41-3.06-3.04-2.57-2.80-3.76-4.00-2.71

Penn National Gaming Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.94660.98051.48661.1450.84940.77210.61240.85770.99091.025
GMI 0.97640.98470.99190.99050.99020.99090.99841.00451.01261.0199
AQI 0.77121.21451.22861.22311.05830.65120.65420.63410.99071.046
SGI 1.03310.95260.8970.87030.93260.99731.06011.1281.09571.1213
DEPI 0.74650.25360.2850.38771.22564.06544.06793.49641.13421.0775
SGAI 0.99610.98330.96810.9780.92750.93490.94160.89670.91880.8812
LVGI 0.57211.17821.20391.29273.56370.5820.58850.62350.97372.9715
TATA -0.2218-0.4292-0.4039-0.3757-0.0988-0.1044-0.1045-0.0956-0.0815-0.0751
M-score -3.53-4.61-4.07-4.30-3.92-2.83-2.92-2.66-2.74-3.29
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