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Penn West Petroleum Ltd (NYSE:PWE)
Beneish M-Score
-3.82 (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 -3.99 suggests that the company is not a manipulator.

PWE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.82   Max: -1.31
Current: -3.82

-3.82
-1.31

During the past 13 years, the highest Beneish M-Score of Penn West Petroleum Ltd was -1.31. The lowest was -3.82. And the median was -2.85.


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 * 0.9954+0.528 * 1.1836+0.404 * 0.6145+0.892 * 0.5356+0.115 * 0.539
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0131+4.679 * -0.1842-0.327 * 1.3562
=-3.99

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $112 Mil.
Revenue was 284.185134931 + 305.701577032 + 282.136630211 + 403.225806452 = $1,275 Mil.
Gross Profit was 140.208050656 + 140.719773554 + 115.707719131 + 166.493236212 = $563 Mil.
Total Current Assets was $575 Mil.
Total Assets was $6,341 Mil.
Property, Plant and Equipment(Net PPE) was $5,059 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,778 Mil.
Selling, General & Admin. Expense(SGA) was $74 Mil.
Total Current Liabilities was $797 Mil.
Long-Term Debt was $1,244 Mil.
Net Income was -575.908337102 + -22.6445612616 + -196.544618799 + -1536.59382588 = $-2,332 Mil.
Non Operating Income was -95.7334539424 + -22.6445612616 + -133.935647488 + -1129.03225806 = $-1,381 Mil.
Cash Flow from Operations was 44.4745967134 + -54.1852001617 + 123.632905373 + 104.058272633 = $218 Mil.
Accounts Receivable was $211 Mil.
Revenue was 581.236944873 + 642.659279778 + 567.056705671 + 590.22556391 = $2,381 Mil.
Gross Profit was 320.588502407 + 392.42843952 + 286.228622862 + 245.30075188 = $1,245 Mil.
Total Current Assets was $355 Mil.
Total Assets was $10,820 Mil.
Property, Plant and Equipment(Net PPE) was $8,501 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,386 Mil.
Selling, General & Admin. Expense(SGA) was $137 Mil.
Total Current Liabilities was $817 Mil.
Long-Term Debt was $1,750 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)
=(112.317201869 / 1275.24914863) / (210.698392517 / 2381.17849423)
=0.08807471 / 0.08848492
=0.9954

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)
=(140.719773554 / 2381.17849423) / (140.208050656 / 1275.24914863)
=0.52265982 / 0.44158334
=1.1836

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 - (575.154530378 + 5058.79692447) / 6341.02216192) / (1 - (355.099446009 + 8501.4985015) / 10820.0890019)
=0.11150737 / 0.18146718
=0.6145

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
=1275.24914863 / 2381.17849423
=0.5356

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))
=(1386.15412999 / (1386.15412999 + 8501.4985015)) / (1778.35836985 / (1778.35836985 + 5058.79692447))
=0.14019042 / 0.26010209
=0.539

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)
=(74.2299651212 / 1275.24914863) / (136.805385648 / 2381.17849423)
=0.05820821 / 0.05745281
=1.0131

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)
=((1243.78109453 + 796.773707221) / 6341.02216192) / ((1750.0681137 + 817.364453728) / 10820.0890019)
=0.32180219 / 0.23728387
=1.3562

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
=(-2331.69134304 - -1381.34592076 - 217.980574558) / 6341.02216192
=-0.1842

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 -3.99 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.88090.6441.9270.90161.03410.81060.90420.7788
GMI 1.01940.90121.53610.85780.93631.0661.08570.8744
AQI 0.95641.69521.11071.27580.8321.02071.10360.6012
SGI 1.3471.75390.5841.20671.19850.95570.74920.8137
DEPI 0.78870.95080.94111.24861.12340.70780.80161.0491
SGAI 1.17681.11172.13181.57320.42281.18571.38640.8445
LVGI 1.3851.08980.92480.86031.12570.86671.0291.0907
TATA -0.1074-0.0672-0.1113-0.013-0.0485-0.0948-0.1296-0.1156
M-score -2.97-2.28-2.37-2.43-2.53-3.12-3.41-3.62

Penn West Petroleum Ltd Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.23230.83960.83110.78630.81430.75490.77080.76921.00770.9954
GMI 1.30151.14481.13471.02030.86950.88830.87250.93181.07961.1836
AQI 1.04811.07421.10361.14721.1191.13520.60120.59840.56020.6145
SGI 0.78560.88460.81510.80840.86730.82230.82210.72880.62720.5356
DEPI 0.78310.7790.7820.75360.79240.80681.0450.99470.93640.539
SGAI 1.36581.01491.01331.10190.84930.88430.83030.86780.97791.0131
LVGI 0.9310.84991.0290.93470.85250.91411.09071.21041.21931.3562
TATA -0.1112-0.1078-0.1298-0.1282-0.1182-0.1137-0.1108-0.1222-0.1117-0.1842
M-score -2.86-3.11-3.33-3.40-3.29-3.37-3.59-3.75-3.54-3.99
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