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Penn West Petroleum Ltd (NYSE:PWE)
Beneish M-Score
-4.70 (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 -4.57 suggests that the company is not a manipulator.

PWE' s Beneish M-Score Range Over the Past 10 Years
Min: -5.13   Max: -1.33
Current: -4.7

-5.13
-1.33

During the past 13 years, the highest Beneish M-Score of Penn West Petroleum Ltd was -1.33. The lowest was -5.13. And the median was -2.91.


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 * 1.366+0.528 * 1.0015+0.404 * 0.0659+0.892 * 0.4624+0.115 * 0.7765
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6439+4.679 * -0.3172-0.327 * 0.8569
=-4.57

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $70.9 Mil.
Revenue was 109.093683247 + 122.537614394 + 150.461212763 + 220.958214833 = $603.1 Mil.
Gross Profit was 57.2169667379 + 51.1865984179 + 65.0234386814 + 99.9051994458 = $273.3 Mil.
Total Current Assets was $500.5 Mil.
Total Assets was $3,012.7 Mil.
Property, Plant and Equipment(Net PPE) was $2,490.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,237.0 Mil.
Selling, General & Admin. Expense(SGA) was $61.0 Mil.
Total Current Liabilities was $492.8 Mil.
Long-Term Debt was $338.0 Mil.
Net Income was -176.991150442 + -102.373196836 + -75.6086496295 + -1171.15146212 = $-1,526.1 Mil.
Non Operating Income was -78.5779676533 + 36.4510625097 + 68.0477846666 + -544.009334208 = $-518.1 Mil.
Cash Flow from Operations was -74.7635032042 + -43.431053203 + 46.121276274 + 19.6893458762 = $-52.4 Mil.
Accounts Receivable was $112.3 Mil.
Revenue was 284.185134931 + 283.05701577 + 287.68426058 + 449.184876864 = $1,304.1 Mil.
Gross Profit was 140.208050656 + 118.075212293 + 121.255349501 + 212.452306625 = $592.0 Mil.
Total Current Assets was $575.2 Mil.
Total Assets was $6,341.0 Mil.
Property, Plant and Equipment(Net PPE) was $5,058.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,756.4 Mil.
Selling, General & Admin. Expense(SGA) was $80.3 Mil.
Total Current Liabilities was $796.8 Mil.
Long-Term Debt was $1,243.8 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)
=(70.949038755 / 603.050725237) / (112.317201869 / 1304.11128815)
=0.1176502 / 0.08612547
=1.366

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)
=(591.990919074 / 1304.11128815) / (273.332203283 / 603.050725237)
=0.45394203 / 0.45324911
=1.0015

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 - (500.457735734 + 2490.08239243) / 3012.66402197) / (1 - (575.154530378 + 5058.79692447) / 6341.02216192)
=0.00734363 / 0.11150737
=0.0659

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
=603.050725237 / 1304.11128815
=0.4624

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))
=(1756.35409841 / (1756.35409841 + 5058.79692447)) / (1236.95249654 / (1236.95249654 + 2490.08239243))
=0.25771316 / 0.33188648
=0.7765

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)
=(61.0104242385 / 603.050725237) / (80.2604189128 / 1304.11128815)
=0.10116964 / 0.06154415
=1.6439

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)
=((337.961550198 + 492.828806836) / 3012.66402197) / ((1243.78109453 + 796.773707221) / 6341.02216192)
=0.27576602 / 0.32180219
=0.8569

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
=(-1526.12445902 - -518.088454685 - -52.383934257) / 3012.66402197
=-0.3172

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 -4.57 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.

Penn West Petroleum Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.88090.6441.9270.90161.03410.81060.90420.76221.5155
GMI 1.01940.90121.53610.85780.93631.0661.08570.85821.2091
AQI 0.95641.69521.11071.27580.8381.01341.10360.60120.3726
SGI 1.3471.75390.5841.20671.19850.95570.74920.83140.4695
DEPI 0.78870.95080.94111.24861.1010.72220.80161.04910.4682
SGAI 1.17681.11172.13181.57320.42281.18571.38640.82661.2275
LVGI 1.3851.08980.92480.86031.14760.85011.0291.09071.3878
TATA -0.1074-0.0804-0.1229-0.013-0.0423-0.0948-0.1296-0.1153-0.319
M-score -2.97-2.34-2.42-2.43-2.51-3.11-3.41-3.62-4.34

Penn West Petroleum Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.81280.75340.75350.75030.99130.97521.48461.39811.29211.366
GMI 0.8710.88990.85870.90831.05651.14921.21141.1841.05341.0015
AQI 1.1191.13520.60120.59840.56020.61450.37260.24010.23490.0659
SGI 0.86890.82380.8410.74720.63760.54660.47930.47870.4860.4624
DEPI 0.79240.80681.0450.99960.94660.5440.46730.46640.36990.7765
SGAI 0.89370.93490.86580.80750.91251.01321.31911.51751.51771.6439
LVGI 0.85250.91411.09071.21041.21931.35621.38781.28491.31660.8569
TATA -0.119-0.1144-0.1114-0.1214-0.1262-0.2016-0.3278-0.3354-0.3838-0.3172
M-score -3.30-3.39-3.61-3.75-3.61-4.10-4.42-4.60-5.01-4.57
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