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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.
During the past 13 years, the highest Beneish M-Score of Pengrowth Energy Corp was 18.54. The lowest was -20.09. And the median was -2.42.
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 Pengrowth Energy Corp 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 * 0.5864||+||0.528 * 0.7387||+||0.404 * 0.6335||+||0.892 * 1.2118||+||0.115 * 1.0953|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7517||+||4.679 * -0.1874||-||0.327 * 1.1638|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $128 Mil.|
Revenue was 709.764134582 + 419.671237853 + 320.036934441 + 247.254725473 = $1,697 Mil.
Gross Profit was 575.875823795 + 261.284170375 + 135.457063712 + 79.7479747975 = $1,052 Mil.
Total Current Assets was $388 Mil.
Total Assets was $5,350 Mil.
Property, Plant and Equipment(Net PPE) was $4,576 Mil.
Depreciation, Depletion and Amortization(DDA) was $482 Mil.
Selling, General & Admin. Expense(SGA) was $90 Mil.
Total Current Liabilities was $519 Mil.
Long-Term Debt was $1,462 Mil.
Net Income was -438.779049601 + 47.4071383162 + -8.12557710065 + -104.590459046 = $-504 Mil.
Non Operating Income was -17.9500520291 + -28.6985741531 + 12.7423822715 + -55.1755175518 = $-89 Mil.
Cash Flow from Operations was 170.828997572 + 150.939969122 + 101.015697138 + 164.806480648 = $588 Mil.
|Accounts Receivable was $181 Mil.
Revenue was 271.522556391 + 383.268858801 + 423.957322987 + 321.38671875 = $1,400 Mil.
Gross Profit was 102.537593985 + 183.462282398 + 220.46556741 + 135.05859375 = $642 Mil.
Total Current Assets was $602 Mil.
Total Assets was $6,234 Mil.
Property, Plant and Equipment(Net PPE) was $4,922 Mil.
Depreciation, Depletion and Amortization(DDA) was $574 Mil.
Selling, General & Admin. Expense(SGA) was $99 Mil.
Total Current Liabilities was $527 Mil.
Long-Term Debt was $1,457 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(128.425251474 / 1696.72703235)||/||(180.733082707 / 1400.13545693)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(261.284170375 / 1400.13545693)||/||(575.875823795 / 1696.72703235)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (388.224072147 + 4575.87582379) / 5350.15608741)||/||(1 - (602.255639098 + 4921.89849624) / 6234.21052632)|
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.
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))|
|=||(573.791283557 / (573.791283557 + 4921.89849624))||/||(482.149034178 / (482.149034178 + 4575.87582379))|
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)|
|=||(90.2677692367 / 1696.72703235)||/||(99.094695766 / 1400.13545693)|
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)|
|=||((1462.01873049 + 518.730489074) / 5350.15608741)||/||((1456.76691729 + 526.503759398) / 6234.21052632)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-504.087947431 - -89.0817614625||-||587.591144479)||/||5350.15608741|
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.
Pengrowth Energy Corp has a M-score of -3.83 suggests that the company will not be a manipulator.
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
Pengrowth Energy Corp Annual Data
Pengrowth Energy Corp Quarterly Data