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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-3.15 (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 -3.15 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: -3.15

-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 -2.56.


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 * 0.9616+0.528 * 1.0228+0.404 * 1.1563+0.892 * 1.0979+0.115 * 0.9072
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8966+4.679 * -0.0614-0.327 * 2.576
=-3.15

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $43 Mil.
Revenue was 765.597 + 769.422 + 756.451 + 733.967 = $3,025 Mil.
Gross Profit was 320.853 + 328.348 + 323.055 + 305.004 = $1,277 Mil.
Total Current Assets was $353 Mil.
Total Assets was $5,252 Mil.
Property, Plant and Equipment(Net PPE) was $2,845 Mil.
Depreciation, Depletion and Amortization(DDA) was $268 Mil.
Selling, General & Admin. Expense(SGA) was $450 Mil.
Total Current Liabilities was $553 Mil.
Long-Term Debt was $5,061 Mil.
Net Income was 46.535 + 34.035 + 23.708 + -9.066 = $95 Mil.
Non Operating Income was 3.909 + 3.592 + 2.183 + 3.66 = $13 Mil.
Cash Flow from Operations was 121.858 + 118.33 + 71.333 + 92.837 = $404 Mil.
Accounts Receivable was $41 Mil.
Revenue was 739.297 + 700.956 + 664.138 + 651.361 = $2,756 Mil.
Gross Profit was 315.927 + 304.537 + 291.314 + 278.121 = $1,190 Mil.
Total Current Assets was $374 Mil.
Total Assets was $5,142 Mil.
Property, Plant and Equipment(Net PPE) was $3,029 Mil.
Depreciation, Depletion and Amortization(DDA) was $256 Mil.
Selling, General & Admin. Expense(SGA) was $458 Mil.
Total Current Liabilities was $535 Mil.
Long-Term Debt was $1,599 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)
=(43.209 / 3025.437) / (40.929 / 2755.752)
=0.0142819 / 0.01485221
=0.9616

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)
=(1189.899 / 2755.752) / (1277.26 / 3025.437)
=0.4317874 / 0.42217372
=1.0228

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 - (353.03 + 2844.992) / 5251.679) / (1 - (373.654 + 3029.375) / 5142.006)
=0.3910477 / 0.33819039
=1.1563

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
=3025.437 / 2755.752
=1.0979

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))
=(256.447 / (256.447 + 3029.375)) / (267.781 / (267.781 + 2844.992))
=0.07804653 / 0.08602651
=0.9072

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)
=(450.371 / 3025.437) / (457.552 / 2755.752)
=0.14886147 / 0.16603526
=0.8966

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)
=((5060.669 + 552.897) / 5251.679) / ((1598.813 + 534.854) / 5142.006)
=1.06890882 / 0.41494837
=2.576

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
=(95.212 - 13.344 - 404.358) / 5251.679
=-0.0614

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 -3.15 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 local exchange's 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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.48661.1450.84940.77210.61240.85770.99091.0250.92580.9616
GMI 0.99190.99050.99020.99090.99841.00451.01261.01991.02041.0228
AQI 1.22861.22311.05830.65120.65420.63410.99071.0461.06391.1563
SGI 0.8970.87030.93260.99731.06011.1281.09571.12131.12651.0979
DEPI 0.2850.38771.22564.06544.06793.49641.13421.07751.01720.9072
SGAI 0.96810.9780.92750.93490.94160.89670.91880.88120.84460.8966
LVGI 1.20391.29273.56370.5820.58850.62350.97372.97152.92552.576
TATA -0.4039-0.3757-0.0988-0.1044-0.1045-0.0956-0.0815-0.0751-0.0683-0.0614
M-score -4.07-4.30-3.92-2.83-2.92-2.66-2.74-3.29-3.32-3.15
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