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Royal Dutch Shell PLC (NYSE:RDS.A)
Beneish M-Score
-2.79 (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.

Royal Dutch Shell PLC has a M-score of -2.91 suggests that the company is not a manipulator.

RDS.A' s 10-Year Beneish M-Score Range
Min: -3.2   Max: -1.48
Current: -2.79

-3.2
-1.48

During the past 13 years, the highest Beneish M-Score of Royal Dutch Shell PLC was -1.48. The lowest was -3.20. And the median was -2.70.


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 Royal Dutch Shell PLC 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 * 0.9543+0.528 * 0.9626+0.404 * 0.9689+0.892 * 0.8508+0.115 * 1.0962
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0866+4.679 * -0.0523-0.327 * 0.9247
=-2.91

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $51,696 Mil.
Revenue was 68846 + 94166 + 109825 + 115274 = $388,111 Mil.
Gross Profit was 14766 + 13061 + 17763 + 22139 = $67,729 Mil.
Total Current Assets was $91,531 Mil.
Total Assets was $341,832 Mil.
Property, Plant and Equipment(Net PPE) was $189,263 Mil.
Depreciation, Depletion and Amortization(DDA) was $21,679 Mil.
Selling, General & Admin. Expense(SGA) was $13,425 Mil.
Total Current Liabilities was $79,502 Mil.
Long-Term Debt was $35,703 Mil.
Net Income was 4430 + 595 + 4463 + 5307 = $14,795 Mil.
Non Operating Income was -1735 + -974 + -462 + -2336 = $-5,507 Mil.
Cash Flow from Operations was 7106 + 9608 + 12811 + 8641 = $38,166 Mil.
Accounts Receivable was $63,670 Mil.
Revenue was 112079 + 111479 + 118258 + 114348 = $456,164 Mil.
Gross Profit was 21065 + 18114 + 19000 + 18447 = $76,626 Mil.
Total Current Assets was $104,423 Mil.
Total Assets was $366,593 Mil.
Property, Plant and Equipment(Net PPE) was $194,608 Mil.
Depreciation, Depletion and Amortization(DDA) was $24,708 Mil.
Selling, General & Admin. Expense(SGA) was $14,522 Mil.
Total Current Liabilities was $92,381 Mil.
Long-Term Debt was $41,236 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)
=(51696 / 388111) / (63670 / 456164)
=0.13319901 / 0.13957699
=0.9543

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)
=(13061 / 456164) / (14766 / 388111)
=0.16797906 / 0.17450935
=0.9626

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 - (91531 + 189263) / 341832) / (1 - (104423 + 194608) / 366593)
=0.1785614 / 0.18429703
=0.9689

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
=388111 / 456164
=0.8508

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))
=(24708 / (24708 + 194608)) / (21679 / (21679 + 189263))
=0.11265936 / 0.10277233
=1.0962

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)
=(13425 / 388111) / (14522 / 456164)
=0.03459062 / 0.03183504
=1.0866

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)
=((35703 + 79502) / 341832) / ((41236 + 92381) / 366593)
=0.33702228 / 0.36448323
=0.9247

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
=(14795 - -5507 - 38166) / 341832
=-0.0523

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.

Royal Dutch Shell PLC has a M-score of -2.91 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.

Royal Dutch Shell PLC Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.53860.44871.22441.46491.19440.89090.88530.50871.0190.7738
GMI 0.91781.0071.05490.91170.91521.06741.02791.0191.04890.9891
AQI 0.77611.16141.08210.97671.15180.94620.93660.92890.96440.9896
SGI 1.15151.03951.11581.32370.60541.32621.28120.99420.95410.9385
DEPI 1.05911.08390.96641.05761.09771.00471.23111.02340.77580.8926
SGAI 0.96450.95330.89650.76841.70290.67170.72181.01321.06331.014
LVGI 1.24030.87171.0781.06640.9371.05680.9430.91840.99970.9739
TATA -0.0543-0.055-0.0456-0.0443-0.024-0.0219-0.0154-0.0524-0.0643-0.0738
M-score -2.30-3.08-2.33-2.00-2.84-2.34-2.32-3.17-2.83-3.10

Royal Dutch Shell PLC Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.50870.88080.91420.89551.65870.99221.07150.99040.9790.9543
GMI 1.0190.99230.9451.01021.04891.06311.02790.98640.98910.9626
AQI 0.92890.80710.82720.82350.96441.07841.00671.01480.98960.9689
SGI 0.99420.95950.95740.98430.95410.96350.97690.95310.93850.8508
DEPI 1.02341.00120.84830.83160.77580.70030.85980.82130.89261.0962
SGAI 1.01321.02361.06531.0171.06331.04721.02321.04111.0141.0866
LVGI 0.91840.92850.94720.96580.99971.0251.04540.98460.97390.9247
TATA -0.0524-0.0492-0.0582-0.0683-0.0643-0.0794-0.053-0.0613-0.0738-0.0523
M-score -3.17-2.92-2.98-2.99-2.24-2.88-2.70-2.84-2.92-2.91
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