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Penn West Petroleum Ltd (NYSE:PWE)
Beneish M-Score
-4.52 (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 West Petroleum Ltd has a M-score of -4.44 suggests that the company is not a manipulator.

PWE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.52   Max: -1.22
Current: -4.52

-4.52
-1.22

During the past 13 years, the highest Beneish M-Score of Penn West Petroleum Ltd was -1.22. The lowest was -4.52. And the median was -2.99.


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 West Petroleum Ltd 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 * 1.3348+0.528 * 1.1238+0.404 * 0.2401+0.892 * 0.5014+0.115 * 0.4696
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3355+4.679 * -0.2921-0.327 * 1.2849
=-4.44

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $101.3 Mil.
Revenue was 150.461212763 + 220.958214833 + 284.185134931 + 305.701577032 = $961.3 Mil.
Gross Profit was 65.0234386814 + 99.9051994458 + 140.208050656 + 140.719773554 = $445.9 Mil.
Total Current Assets was $397.7 Mil.
Total Assets was $4,244.7 Mil.
Property, Plant and Equipment(Net PPE) was $3,738.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,853.3 Mil.
Selling, General & Admin. Expense(SGA) was $71.1 Mil.
Total Current Liabilities was $477.8 Mil.
Long-Term Debt was $1,196.9 Mil.
Net Income was -75.6086496295 + -1171.15146212 + -575.908337102 + -22.6445612616 = $-1,845.3 Mil.
Non Operating Income was 0.756086496295 + -544.009334208 + -95.7334539424 + -22.6445612616 = $-661.6 Mil.
Cash Flow from Operations was 46.121276274 + 19.6893458762 + 44.4745967134 + -54.1852001617 = $56.1 Mil.
Accounts Receivable was $151.4 Mil.
Revenue was 282.136630211 + 446.583420049 + 552.17509763 + 636.195752539 = $1,917.1 Mil.
Gross Profit was 115.707719131 + 195.976413458 + 296.067568795 + 391.505078486 = $999.3 Mil.
Total Current Assets was $245.7 Mil.
Total Assets was $7,745.3 Mil.
Property, Plant and Equipment(Net PPE) was $6,677.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,230.8 Mil.
Selling, General & Admin. Expense(SGA) was $106.2 Mil.
Total Current Liabilities was $629.3 Mil.
Long-Term Debt was $1,749.1 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)
=(101.315590504 / 961.306139559) / (151.37105722 / 1917.09090043)
=0.10539368 / 0.07895873
=1.3348

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)
=(999.25677987 / 1917.09090043) / (445.856462337 / 961.306139559)
=0.52123599 / 0.46380278
=1.1238

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 - (397.701497051 + 3738.84772418) / 4244.6695902) / (1 - (245.680773498 + 6677.76192741) / 7745.28451419)
=0.02547203 / 0.10610867
=0.2401

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
=961.306139559 / 1917.09090043
=0.5014

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))
=(1230.78562319 / (1230.78562319 + 6677.76192741)) / (1853.28361588 / (1853.28361588 + 3738.84772418))
=0.15562726 / 0.33140917
=0.4696

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)
=(71.1271739915 / 961.306139559) / (106.213166301 / 1917.09090043)
=0.07399014 / 0.0554033
=1.3355

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)
=((1196.88492364 + 477.846665659) / 4244.6695902) / ((1749.08860358 + 629.259787605) / 7745.28451419)
=0.39454934 / 0.3070705
=1.2849

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
=(-1845.31301011 - -661.631262916 - 56.1000187018) / 4244.6695902
=-0.2921

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 West Petroleum Ltd has a M-score of -4.44 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 West Petroleum Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.88110.69161.79430.90161.06560.89250.7990.77671.4834
GMI 1.01920.93651.47820.86860.94981.14020.92840.93081.1867
AQI 0.95641.69561.11041.38640.84060.9291.07680.61660.3726
SGI 1.34671.63360.6271.20671.16310.8680.84140.8220.4797
DEPI 0.78870.95070.94121.03811.3050.76040.75741.07010.4682
SGAI 1.18861.19241.98750.93361.12690.93460.93611.00321.2014
LVGI 1.3851.08970.92490.8891.08940.84571.02231.12521.3878
TATA -0.1074-0.0777-0.1229-0.0871-0.0469-0.1003-0.134-0.1156-0.319
M-score -2.97-2.38-2.51-2.65-2.60-3.09-3.46-3.61-4.37

Penn West Petroleum Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.71110.70410.72550.68170.78470.76350.98560.93761.43361.3348
GMI 0.82021.06960.95910.98131.09560.97571.11151.18991.17831.1238
AQI 1.07681.11881.1191.13520.61660.61360.56020.61450.37260.2401
SGI 0.94540.89670.97340.91050.81370.73920.64130.56850.49640.5014
DEPI 0.74780.72960.75350.77651.05471.01720.98390.5660.46930.4696
SGAI 1.67110.33940.31360.30220.4421.10141.12121.1371.17981.3355
LVGI 1.02230.92820.85250.91411.12521.21881.21931.35621.38781.2849
TATA -0.0934-0.1327-0.1295-0.127-0.1123-0.1231-0.1055-0.1729-0.3017-0.2921
M-score -3.45-3.27-3.20-3.28-3.41-3.76-3.52-3.98-4.32-4.44
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