Switch to:
Penn West Petroleum Ltd (NYSE:PWE)
Beneish M-Score
-5.12 (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 -5.00 suggests that the company is not a manipulator.

PWE' s Beneish M-Score Range Over the Past 10 Years
Min: -5.12   Max: -1.22
Current: -5.12

-5.12
-1.22

During the past 13 years, the highest Beneish M-Score of Penn West Petroleum Ltd was -1.22. The lowest was -5.12. And the median was -3.05.


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 * 1.2804+0.528 * 1.0302+0.404 * 0.2349+0.892 * 0.4904+0.115 * 0.3755
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3698+4.679 * -0.3838-0.327 * 1.3166
=-5.00

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $100.0 Mil.
Revenue was 122.537614394 + 150.461212763 + 220.958214833 + 284.185134931 = $778.1 Mil.
Gross Profit was 51.1865984179 + 65.0234386814 + 99.9051994458 + 140.208050656 = $356.3 Mil.
Total Current Assets was $1,079.6 Mil.
Total Assets was $3,795.6 Mil.
Property, Plant and Equipment(Net PPE) was $2,626.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,868.9 Mil.
Selling, General & Admin. Expense(SGA) was $61.6 Mil.
Total Current Liabilities was $783.3 Mil.
Long-Term Debt was $621.2 Mil.
Net Income was -102.373196836 + -75.6086496295 + -1171.15146212 + -575.908337102 = $-1,925.0 Mil.
Non Operating Income was 36.4510625097 + 68.0477846666 + -544.009334208 + -95.7334539424 = $-535.2 Mil.
Cash Flow from Operations was -43.431053203 + 46.121276274 + 19.6893458762 + 44.4745967134 = $66.9 Mil.
Accounts Receivable was $159.3 Mil.
Revenue was 305.701577032 + 282.136630211 + 446.583420049 + 552.17509763 = $1,586.6 Mil.
Gross Profit was 140.719773554 + 115.707719131 + 195.976413458 + 296.067568795 = $748.5 Mil.
Total Current Assets was $338.1 Mil.
Total Assets was $7,581.9 Mil.
Property, Plant and Equipment(Net PPE) was $6,478.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,198.6 Mil.
Selling, General & Admin. Expense(SGA) was $91.7 Mil.
Total Current Liabilities was $606.6 Mil.
Long-Term Debt was $1,524.5 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)
=(100.046533271 / 778.142176921) / (159.320663162 / 1586.59672492)
=0.12857102 / 0.10041661
=1.2804

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)
=(748.471474939 / 1586.59672492) / (356.323287201 / 778.142176921)
=0.47174651 / 0.4579154
=1.0302

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 - (1079.5718939 + 2626.02760974) / 3795.56382814) / (1 - (338.050950263 + 6478.77072382) / 7581.88435099)
=0.02370249 / 0.10090667
=0.2349

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
=778.142176921 / 1586.59672492
=0.4904

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))
=(1198.61397735 / (1198.61397735 + 6478.77072382)) / (1868.89405757 / (1868.89405757 + 2626.02760974))
=0.15612269 / 0.415779
=0.3755

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)
=(61.6006799765 / 778.142176921) / (91.6940327888 / 1586.59672492)
=0.07916378 / 0.0577929
=1.3698

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)
=((621.219171708 + 783.310066698) / 3795.56382814) / ((1524.46421351 + 606.550748079) / 7581.88435099)
=0.37004495 / 0.28106667
=1.3166

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
=(-1925.04164568 - -535.243940975 - 66.8541656605) / 3795.56382814
=-0.3838

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 -5.00 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 0.88090.69161.79430.90161.06560.89250.7990.77671.4834
GMI 1.01940.93651.47820.86860.94981.14020.92840.93081.1867
AQI 0.95641.69561.11041.38640.84060.9291.07680.61660.3726
SGI 1.3471.63360.6271.20671.16310.8680.84140.8220.4797
DEPI 0.78870.95070.94121.03811.3050.76040.75741.07010.4682
SGAI 1.17681.19241.98750.93361.12690.93460.93611.00321.2014
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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.70410.72550.68170.78470.76350.98560.93761.43361.33481.2804
GMI 1.06960.95910.98131.09560.97571.11151.18991.17831.12381.0302
AQI 1.11881.1191.13520.61660.61360.56020.61450.37260.24010.2349
SGI 0.89670.97340.91050.81370.73920.64130.56850.49640.50140.4904
DEPI 0.73870.75870.77651.05471.01720.98390.5660.46930.46960.3755
SGAI 0.33940.31360.30220.4421.10141.12121.1371.17981.33551.3698
LVGI 0.92820.85250.91411.12521.21881.21931.35621.38781.28491.3166
TATA -0.1327-0.1295-0.127-0.1123-0.1231-0.1055-0.1729-0.3017-0.3079-0.3838
M-score -3.27-3.20-3.28-3.41-3.76-3.52-3.98-4.32-4.51-5.00
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK