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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-3.87 (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 -3.87 suggests that the company is not a manipulator.

PENN' s 10-Year Beneish M-Score Range
Min: -5.34   Max: -0.5
Current: -3.87

-5.34
-0.5

During the past 13 years, the highest Beneish M-Score of Penn National Gaming Inc was -0.50. The lowest was -5.34. And the median was -2.52.


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 * 0.6468+0.528 * 0.9959+0.404 * 0.875+0.892 * 1.0038+0.115 * 1.7635
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1807+4.679 * -0.2172-0.327 * 1.1633
=-3.87

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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 $407 Mil.
Total Assets was $2,325 Mil.
Property, Plant and Equipment(Net PPE) was $835 Mil.
Depreciation, Depletion and Amortization(DDA) was $169 Mil.
Selling, General & Admin. Expense(SGA) was $896 Mil.
Total Current Liabilities was $492 Mil.
Long-Term Debt was $1,217 Mil.
Net Income was 16.886 + 10.996 + -250.407 + 8.499 = $-214 Mil.
Non Operating Income was 3.198 + 7.071 + 3.255 + 3.874 = $17 Mil.
Cash Flow from Operations was 109.833 + 65.561 + 15.317 + 82.811 = $274 Mil.
Accounts Receivable was $70 Mil.
Revenue was 652.146 + 641.08 + 644.702 + 714.435 = $2,652 Mil.
Gross Profit was 287.636 + 277.465 + 273.94 + 304.388 = $1,143 Mil.
Total Current Assets was $497 Mil.
Total Assets was $2,254 Mil.
Property, Plant and Equipment(Net PPE) was $557 Mil.
Depreciation, Depletion and Amortization(DDA) was $235 Mil.
Selling, General & Admin. Expense(SGA) was $756 Mil.
Total Current Liabilities was $396 Mil.
Long-Term Debt was $1,028 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)
=(45.135 / 2662.395) / (69.521 / 2652.363)
=0.01695278 / 0.02621097
=0.6468

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)
=(291.314 / 2652.363) / (304.537 / 2662.395)
=0.43109823 / 0.43288731
=0.9959

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 - (406.641 + 835.462) / 2325.048) / (1 - (497.101 + 557.044) / 2253.858)
=0.46577318 / 0.53229307
=0.875

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
=2662.395 / 2652.363
=1.0038

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))
=(235.189 / (235.189 + 557.044)) / (169.106 / (169.106 + 835.462))
=0.29686847 / 0.16833704
=1.7635

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)
=(896.239 / 2662.395) / (756.236 / 2652.363)
=0.33662886 / 0.28511784
=1.1807

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)
=((1216.908 + 491.524) / 2325.048) / ((1027.976 + 395.68) / 2253.858)
=0.73479429 / 0.63165293
=1.1633

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
=(-214.026 - 17.398 - 273.522) / 2325.048
=-0.2172

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 -3.87 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

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 1.27790.90270.98480.79480.8631.10750.91271.03491.25440.8966
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 0.87931.00780.85851.07471.00820.98640.87861.20971.12771.6406
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 -2.13-2.30-2.62-3.39-3.08-3.04-2.57-2.80-5.11-3.75

Penn National Gaming Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.97180.91630.70080.97151.00171.51351.16380.89250.81370.6468
GMI 0.97020.9610.96640.9730.98310.98990.98860.99290.98870.9959
AQI 1.05071.04371.06511.25441.21451.22861.22310.89660.87690.875
SGI 1.05351.06151.06561.00670.93240.8810.85620.88750.94641.0038
DEPI 0.91750.82480.78480.21990.27570.33210.50611.98591.8361.7635
SGAI 1.21461.22091.12731.13971.33741.53121.78371.63371.37871.1807
LVGI 1.05181.02720.99671.13651.17821.20391.29271.17461.16791.1633
TATA -0.0582-0.0707-0.0781-0.5106-0.4737-0.4689-0.4214-0.2075-0.2203-0.2172
M-score -2.79-2.90-3.10-4.96-4.88-4.46-4.63-3.75-3.81-3.87
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