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Penn National Gaming Inc (NAS:PENN)
Beneish M-Score
-4.63 (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 -4.63 suggests that the company is not a manipulator.

PENN' s 10-Year Beneish M-Score Range
Min: -8.41   Max: -0.5
Current: -4.63

-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 -2.49.


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 * 1.1638+0.528 * 0.9886+0.404 * 1.2231+0.892 * 0.8562+0.115 * 0.5061
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7687+4.679 * -0.4214-0.327 * 1.2927
=-4.63

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $42 Mil.
Revenue was 645.94 + 652.146 + 641.08 + 644.702 = $2,584 Mil.
Gross Profit was 278.545 + 287.636 + 277.465 + 273.94 = $1,118 Mil.
Total Current Assets was $404 Mil.
Total Assets was $2,463 Mil.
Property, Plant and Equipment(Net PPE) was $745 Mil.
Depreciation, Depletion and Amortization(DDA) was $195 Mil.
Selling, General & Admin. Expense(SGA) was $846 Mil.
Total Current Liabilities was $440 Mil.
Long-Term Debt was $1,199 Mil.
Net Income was 8.499 + 4.176 + 4.537 + -888.747 = $-872 Mil.
Non Operating Income was 3.874 + -0.35 + 4.114 + -58.668 = $-51 Mil.
Cash Flow from Operations was 82.811 + 98.265 + 23.608 + 12.844 = $218 Mil.
Accounts Receivable was $42 Mil.
Revenue was 714.435 + 761.371 + 798.246 + 743.811 = $3,018 Mil.
Gross Profit was 304.388 + 330.572 + 345.963 + 309.492 = $1,290 Mil.
Total Current Assets was $401 Mil.
Total Assets was $5,397 Mil.
Property, Plant and Equipment(Net PPE) was $2,642 Mil.
Depreciation, Depletion and Amortization(DDA) was $310 Mil.
Selling, General & Admin. Expense(SGA) was $559 Mil.
Total Current Liabilities was $478 Mil.
Long-Term Debt was $2,300 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)
=(42.303 / 2583.868) / (42.453 / 3017.863)
=0.01637197 / 0.01406724
=1.1638

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)
=(287.636 / 3017.863) / (278.545 / 2583.868)
=0.42759231 / 0.43252442
=0.9886

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 - (404.073 + 745.355) / 2463.099) / (1 - (401.235 + 2642.297) / 5396.738)
=0.53334072 / 0.43604229
=1.2231

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
=2583.868 / 3017.863
=0.8562

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))
=(310.475 / (310.475 + 2642.297)) / (195.474 / (195.474 + 745.355))
=0.10514696 / 0.20776783
=0.5061

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)
=(846.231 / 2583.868) / (558.825 / 3017.863)
=0.32750551 / 0.18517242
=1.7687

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)
=((1198.848 + 440.271) / 2463.099) / ((2299.929 + 478.163) / 5396.738)
=0.66547021 / 0.51477244
=1.2927

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
=(-871.535 - -51.03 - 217.528) / 2463.099
=-0.4214

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 -4.63 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 1.37130.9470.69351.01160.77661.09540.91791.11840.91620.9715
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 -2.42-2.13-2.30-2.62-3.39-3.08-3.04-2.58-2.80-5.11

Penn National Gaming Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.95681.26550.91620.97180.91630.70080.97151.00171.51351.1638
GMI 1.00120.99390.97760.97020.9610.96640.9730.98310.98990.9886
AQI 1.00290.97011.03491.05071.04371.06511.25441.21451.22861.2231
SGI 1.0811.05051.05731.05351.06151.06561.00670.93240.8810.8562
DEPI 1.10851.06611.03080.91750.82480.78480.21990.27570.33210.5061
SGAI 1.02031.09931.21361.22591.19451.10521.11941.31491.51841.7687
LVGI 0.96621.01321.05971.05181.02720.99671.13651.17821.20391.2927
TATA -0.0509-0.0451-0.0527-0.0582-0.0839-0.0915-0.5435-0.5055-0.4689-0.4214
M-score -2.66-2.43-2.80-2.79-2.96-3.16-5.11-5.02-4.45-4.63
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