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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-4.87 (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 -4.87 suggests that the company is not a manipulator.

PENN' s 10-Year Beneish M-Score Range
Min: -7.79   Max: -0.5
Current: -4.87

-7.79
-0.5

During the past 13 years, the highest Beneish M-Score of Penn National Gaming Inc was -0.50. The lowest was -7.79. And the median was -2.46.


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 * 1.0017+0.528 * 0.9831+0.404 * 1.2145+0.892 * 0.9324+0.115 * 0.2757
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3198+4.679 * -0.4737-0.327 * 1.1782
=-4.87

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $53 Mil.
Revenue was 641.08 + 644.702 + 714.435 + 761.371 = $2,762 Mil.
Gross Profit was 277.465 + 273.94 + 304.388 + 330.572 = $1,186 Mil.
Total Current Assets was $508 Mil.
Total Assets was $2,253 Mil.
Property, Plant and Equipment(Net PPE) was $550 Mil.
Depreciation, Depletion and Amortization(DDA) was $269 Mil.
Selling, General & Admin. Expense(SGA) was $675 Mil.
Total Current Liabilities was $395 Mil.
Long-Term Debt was $1,035 Mil.
Net Income was 4.537 + -888.747 + 41.317 + -12.18 = $-855 Mil.
Non Operating Income was 4.114 + -58.668 + 1.86 + -65.623 = $-118 Mil.
Cash Flow from Operations was 23.608 + 12.844 + 136.528 + 157.642 = $331 Mil.
Accounts Receivable was $57 Mil.
Revenue was 798.246 + 743.811 + 707.044 + 712.551 = $2,962 Mil.
Gross Profit was 345.963 + 309.492 + 298.68 + 296.691 = $1,251 Mil.
Total Current Assets was $427 Mil.
Total Assets was $5,566 Mil.
Property, Plant and Equipment(Net PPE) was $2,707 Mil.
Depreciation, Depletion and Amortization(DDA) was $269 Mil.
Selling, General & Admin. Expense(SGA) was $548 Mil.
Total Current Liabilities was $472 Mil.
Long-Term Debt was $2,525 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)
=(53.137 / 2761.588) / (56.888 / 2961.652)
=0.01924147 / 0.0192082
=1.0017

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)
=(273.94 / 2961.652) / (277.465 / 2761.588)
=0.42234064 / 0.42959522
=0.9831

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 - (507.637 + 550.427) / 2253.44) / (1 - (427.458 + 2707.172) / 5565.576)
=0.5304672 / 0.43678246
=1.2145

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
=2761.588 / 2961.652
=0.9324

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))
=(269.082 / (269.082 + 2707.172)) / (268.621 / (268.621 + 550.427))
=0.09040962 / 0.32796735
=0.2757

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)
=(674.955 / 2761.588) / (548.455 / 2961.652)
=0.24440829 / 0.1851855
=1.3198

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)
=((1034.835 + 394.833) / 2253.44) / ((2525.316 + 471.715) / 5565.576)
=0.63443801 / 0.53849431
=1.1782

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
=(-855.073 - -118.317 - 330.622) / 2253.44
=-0.4737

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 -4.87 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 1.37131.96420.95560.3540.77661.88150.53441.14010.89880.9715
GMI 0.88811.02480.98471.04681.04551.02150.98280.98860.97760.973
AQI 0.98961.27790.90270.98480.79480.86731.1020.91271.03491.2544
SGI 1.15621.23241.62951.03630.99440.97781.03791.11511.05731.0067
DEPI 1.02921.55150.76251.03580.99570.91340.98141.14751.03080.2199
SGAI 1.25430.87931.00780.85851.07471.00820.96870.92361.1881.1124
LVGI 0.90341.18550.9570.95710.79261.05540.98730.9381.05971.1365
TATA -0.07540.0087-0.0074-0.0523-0.1492-0.127-0.1193-0.0681-0.0527-0.5435
M-score -2.42-1.20-2.06-3.23-3.39-2.35-3.39-2.56-2.81-5.11

Penn National Gaming Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.14011.20650.94151.26550.89880.97180.91990.71280.97151.0017
GMI 0.98860.99561.00120.99390.97760.97020.9610.96640.9730.9831
AQI 0.91270.90421.00290.97011.03491.05071.04371.06511.25441.2145
SGI 1.11511.10951.0811.05051.05731.05351.06151.06561.00670.9324
DEPI 1.14751.18051.10851.06611.03080.91750.82480.78480.21990.2757
SGAI 0.89840.91051.02031.09931.21361.22591.19981.11011.12411.3198
LVGI 0.9380.94620.96621.01321.05971.05181.02720.99671.13651.1782
TATA -0.0681-0.067-0.0509-0.0451-0.0527-0.0582-0.0707-0.0781-0.5106-0.4737
M-score -2.55-2.49-2.68-2.43-2.82-2.79-2.90-3.09-4.96-4.87
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