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GuruFocus has detected 2 Warning Signs with Pengrowth Energy Corp $PGH.
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Pengrowth Energy Corp (NYSE:PGH)
Beneish M-Score
-3.10 (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.

Pengrowth Energy Corp has a M-score of -3.05 suggests that the company is not a manipulator.

PGH' s Beneish M-Score Range Over the Past 10 Years
Min: -20.09   Max: 2.09
Current: -3.1

-20.09
2.09

During the past 13 years, the highest Beneish M-Score of Pengrowth Energy Corp was 2.09. The lowest was -20.09. And the median was -2.75.


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 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 * 1.6574+0.528 * 1.6027+0.404 * 0.9408+0.892 * 0.472+0.115 * 1.1543
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7435+4.679 * -0.1888-0.327 * 1.0245
=-3.05

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $70.8 Mil.
Revenue was 105.929979759 + 125.953616112 + -7.75554521483 + 174.655980644 = $398.8 Mil.
Gross Profit was 36.7343878851 + 59.5819346964 + -71.9714595936 + 108.876455467 = $133.2 Mil.
Total Current Assets was $388.3 Mil.
Total Assets was $3,074.7 Mil.
Property, Plant and Equipment(Net PPE) was $2,507.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $277.9 Mil.
Selling, General & Admin. Expense(SGA) was $63.6 Mil.
Total Current Liabilities was $685.8 Mil.
Long-Term Debt was $767.4 Mil.
Net Income was -69.270560012 + -40.3570338724 + -134.481154025 + 18.9021624074 = $-225.2 Mil.
Non Operating Income was -21.0660469301 + -10.8330790357 + -5.81665891112 + 17.6924240133 = $-20.0 Mil.
Cash Flow from Operations was 99.0329110128 + 109.780286848 + 78.5636730262 + 88.0084681688 = $375.4 Mil.
Accounts Receivable was $90.6 Mil.
Revenue was 220.301903303 + 314.262023217 + 136.999595633 + 173.403074972 = $845.0 Mil.
Gross Profit was 140.013126231 + 221.996080205 + 17.8730287101 + 72.5154541132 = $452.4 Mil.
Total Current Assets was $312.3 Mil.
Total Assets was $3,318.5 Mil.
Property, Plant and Equipment(Net PPE) was $2,801.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $364.6 Mil.
Selling, General & Admin. Expense(SGA) was $77.3 Mil.
Total Current Liabilities was $179.9 Mil.
Long-Term Debt was $1,351.1 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)
=(70.8448909214 / 398.7840313) / (90.5709910304 / 844.966597126)
=0.17765228 / 0.10718884
=1.6574

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)
=(452.397689259 / 844.966597126) / (133.221318454 / 398.7840313)
=0.53540305 / 0.33406884
=1.6027

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 - (388.259989504 + 2507.90913862) / 3074.66826599) / (1 - (312.331364399 + 2801.42930066) / 3318.52986217)
=0.05805476 / 0.06170479
=0.9408

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
=398.7840313 / 844.966597126
=0.472

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))
=(364.615913873 / (364.615913873 + 2801.42930066)) / (277.940987627 / (277.940987627 + 2507.90913862))
=0.11516447 / 0.09976882
=1.1543

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)
=(63.61535681 / 398.7840313) / (77.310608541 / 844.966597126)
=0.15952333 / 0.09149546
=1.7435

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)
=((767.448834245 + 685.808531374) / 3074.66826599) / ((1351.12666813 + 179.902282506) / 3318.52986217)
=0.47265501 / 0.46135759
=1.0245

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
=(-225.206585502 - -20.0233608636 - 375.385339056) / 3074.66826599
=-0.1888

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 -3.05 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 local exchange's currency.

Pengrowth Energy Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.97230.75461.69520.80860.93471.1271.01360.58771.44051.5973
GMI 0.71541.33641.23160.91091.04551.0061.11840.73341.15161.6032
AQI 0.83521.06111.07451.62930.5670.74761.0950.63350.85510.9408
SGI 1.61151.03040.63681.21011.01221.10510.89371.20890.48960.4897
DEPI 0.70081.07110.92571.3021.20661.02310.85321.1070.84181.1131
SGAI 7.19780.42850.46840.67641.43991.2711.04610.74461.70751.7603
LVGI 1.4921.14970.79510.86130.94431.17241.12111.16381.24621.0245
TATA -0.0761-0.1115-0.1165-0.1284-0.107-0.078-0.1011-0.1839-0.2868-0.1856
M-score -3.79-2.94-2.41-2.73-3.21-2.83-3.00-3.82-4.07-3.09

Pengrowth Energy Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.97830.58610.49990.5970.7081.41621.44871.33541.85381.6574
GMI 1.08670.73870.68640.63660.69121.15841.1151.13281.44431.6027
AQI 1.02580.63350.51410.4960.55130.85510.93921.04360.86790.9408
SGI 0.80481.21221.2241.17821.06030.4980.52140.48720.38460.472
DEPI 1.22231.09491.03640.9890.8710.82780.8970.9391.08021.1543
SGAI 1.11450.75170.76070.81190.86521.71971.52281.53691.86011.7435
LVGI 1.1041.16381.12721.18011.29621.24621.10151.06630.99931.0245
TATA -0.0981-0.1883-0.1887-0.2071-0.2992-0.2982-0.2814-0.2915-0.2463-0.1888
M-score -3.11-3.84-3.98-4.08-4.53-4.14-3.91-4.03-3.35-3.05
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