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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-3.75 (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 -3.75 suggests that the company is not a manipulator.

PENN' s 10-Year Beneish M-Score Range
Min: -5.11   Max: -0.5
Current: -3.75

-5.11
-0.5

During the past 13 years, the highest Beneish M-Score of Penn National Gaming Inc was -0.50. The lowest was -5.11. And the median was -2.43.


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 * 0.8925+0.528 * 0.9929+0.404 * 0.8966+0.892 * 0.8875+0.115 * 1.9859
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6406+4.679 * -0.2075-0.327 * 1.1746
=-3.75

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $42 Mil.
Revenue was 651.361 + 645.94 + 652.146 + 641.08 = $2,591 Mil.
Gross Profit was 278.121 + 278.545 + 287.636 + 277.465 = $1,122 Mil.
Total Current Assets was $386 Mil.
Total Assets was $2,236 Mil.
Property, Plant and Equipment(Net PPE) was $769 Mil.
Depreciation, Depletion and Amortization(DDA) was $179 Mil.
Selling, General & Admin. Expense(SGA) was $868 Mil.
Total Current Liabilities was $436 Mil.
Long-Term Debt was $1,230 Mil.
Net Income was -250.407 + 8.499 + 4.176 + 4.537 = $-233 Mil.
Non Operating Income was 3.255 + 3.874 + -0.35 + 4.114 = $11 Mil.
Cash Flow from Operations was 15.317 + 82.811 + 98.265 + 23.608 = $220 Mil.
Accounts Receivable was $53 Mil.
Revenue was 644.702 + 714.435 + 761.371 + 798.246 = $2,919 Mil.
Gross Profit was 273.94 + 304.388 + 330.572 + 345.963 = $1,255 Mil.
Total Current Assets was $509 Mil.
Total Assets was $2,184 Mil.
Property, Plant and Equipment(Net PPE) was $497 Mil.
Depreciation, Depletion and Amortization(DDA) was $298 Mil.
Selling, General & Admin. Expense(SGA) was $596 Mil.
Total Current Liabilities was $361 Mil.
Long-Term Debt was $1,023 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)
=(41.618 / 2590.527) / (52.538 / 2918.754)
=0.01606546 / 0.01800015
=0.8925

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)
=(278.545 / 2918.754) / (278.121 / 2590.527)
=0.42993106 / 0.43302656
=0.9929

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 - (386.006 + 769.145) / 2236.43) / (1 - (508.861 + 497.457) / 2183.991)
=0.48348439 / 0.53922979
=0.8966

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
=2590.527 / 2918.754
=0.8875

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))
=(298.326 / (298.326 + 497.457)) / (178.981 / (178.981 + 769.145))
=0.37488361 / 0.18877343
=1.9859

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)
=(867.793 / 2590.527) / (595.984 / 2918.754)
=0.33498705 / 0.20419124
=1.6406

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)
=((1229.979 + 435.519) / 2236.43) / ((1023.194 + 361.469) / 2183.991)
=0.74471278 / 0.63400582
=1.1746

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
=(-233.195 - 10.893 - 220.001) / 2236.43
=-0.2075

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 -3.75 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.9470.69351.01160.77661.09540.91791.11840.91620.97150.8925
GMI 1.02480.98471.04681.04551.02150.98280.98860.97760.9730.9929
AQI 1.27790.90270.98480.79480.86731.1020.91271.03491.25440.8966
SGI 1.23241.62951.03630.99440.97781.03791.11511.05731.00670.8875
DEPI 1.55150.76251.03580.99570.91340.98141.14751.03080.21991.9859
SGAI 0.87931.00780.85851.07471.00820.96870.92361.1881.11241.6406
LVGI 1.18550.9570.95710.79261.05540.98730.9381.05971.13651.1746
TATA 0.0087-0.0074-0.0523-0.1492-0.127-0.1193-0.0681-0.0527-0.5435-0.2075
M-score -2.13-2.30-2.62-3.39-3.08-3.04-2.58-2.80-5.11-3.75

Penn National Gaming Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.26550.91620.97180.91630.70080.97151.00171.51351.16380.8925
GMI 0.99390.97760.97020.9610.96640.9730.98310.98990.98860.9929
AQI 0.97011.03491.05071.04371.06511.25441.21451.22861.22310.8966
SGI 1.05051.05731.05351.06151.06561.00670.93240.8810.85620.8875
DEPI 1.06611.03080.91750.82480.78480.21990.27570.33210.50611.9859
SGAI 1.09931.21361.22591.19451.10521.11941.31491.51841.76871.6406
LVGI 1.01321.05971.05181.02720.99671.13651.17821.20391.29271.1746
TATA -0.0451-0.0527-0.0582-0.0839-0.0915-0.5435-0.5055-0.4689-0.4214-0.2075
M-score -2.43-2.80-2.79-2.96-3.16-5.11-5.02-4.45-4.63-3.75
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