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GuruFocus has detected 3 Warning Signs with EchoStar Corp $SATS.
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EchoStar Corp (NAS:SATS)
Beneish M-Score
-2.92 (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.

EchoStar Corp has a M-score of -2.92 suggests that the company is not a manipulator.

SATS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Max: 0.15
Current: -2.92

-3.17
0.15

During the past 11 years, the highest Beneish M-Score of EchoStar Corp was 0.15. The lowest was -3.17. And the median was -2.81.


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 EchoStar Corp 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 * 1.1006+0.528 * 0.9855+0.404 * 0.7779+0.892 * 0.9723+0.115 * 1.1273
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0601+4.679 * -0.072-0.327 * 1.2389
=-2.92

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $488 Mil.
Revenue was 740.393 + 742.349 + 757.629 + 816.359 = $3,057 Mil.
Gross Profit was 333.782 + 327.742 + 327.266 + 332.334 = $1,321 Mil.
Total Current Assets was $3,723 Mil.
Total Assets was $9,009 Mil.
Property, Plant and Equipment(Net PPE) was $3,669 Mil.
Depreciation, Depletion and Amortization(DDA) was $495 Mil.
Selling, General & Admin. Expense(SGA) was $386 Mil.
Total Current Liabilities was $531 Mil.
Long-Term Debt was $3,623 Mil.
Net Income was 38.188 + 36.801 + 55.786 + 49.155 = $180 Mil.
Non Operating Income was -0.433 + 6.039 + 10.336 + 8.885 = $25 Mil.
Cash Flow from Operations was 228.634 + 219.075 + 162.785 + 192.849 = $803 Mil.
Accounts Receivable was $456 Mil.
Revenue was 790.587 + 760.879 + 793.595 + 798.653 = $3,144 Mil.
Gross Profit was 338.393 + 333.204 + 337.207 + 330.19 = $1,339 Mil.
Total Current Assets was $2,134 Mil.
Total Assets was $7,209 Mil.
Property, Plant and Equipment(Net PPE) was $3,413 Mil.
Depreciation, Depletion and Amortization(DDA) was $528 Mil.
Selling, General & Admin. Expense(SGA) was $374 Mil.
Total Current Liabilities was $527 Mil.
Long-Term Debt was $2,157 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)
=(488.403 / 3056.73) / (456.399 / 3143.714)
=0.15977957 / 0.14517828
=1.1006

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)
=(1338.994 / 3143.714) / (1321.124 / 3056.73)
=0.42592742 / 0.43220173
=0.9855

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 - (3723.287 + 3669.303) / 9008.859) / (1 - (2133.659 + 3412.99) / 7209.486)
=0.17940885 / 0.23064571
=0.7779

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
=3056.73 / 3143.714
=0.9723

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))
=(528.158 / (528.158 + 3412.99)) / (495.068 / (495.068 + 3669.303))
=0.13401121 / 0.11888182
=1.1273

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)
=(385.634 / 3056.73) / (374.116 / 3143.714)
=0.126159 / 0.11900446
=1.0601

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)
=((3622.879 + 531.438) / 9008.859) / ((2156.667 + 526.831) / 7209.486)
=0.46113687 / 0.37221766
=1.2389

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
=(179.93 - 24.827 - 803.343) / 9008.859
=-0.072

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.

EchoStar Corp has a M-score of -2.92 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.

EchoStar Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 6.8711.58180.49771.34010.98530.99190.76831.20561.1006
GMI 0.29570.88880.95380.77170.93521.00920.85680.89790.9855
AQI 0.49081.47871.08111.00310.98630.99930.88880.96650.7779
SGI 1.39280.88521.23471.17491.13051.05151.04970.91240.9723
DEPI 0.23771.10551.07721.12880.91220.89711.11921.10731.1273
SGAI 1.26060.99990.82911.79811.08690.92380.97911.10221.0601
LVGI 5.45820.9550.85792.49010.97850.9530.90250.94961.2389
TATA -0.2086-0.0744-0.0901-0.0703-0.0804-0.0729-0.0965-0.0833-0.072
M-score 0.13-2.23-3.06-3.07-2.81-2.76-3.17-2.81-2.92

EchoStar Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.92850.76830.77620.87950.93111.20561.2721.23541.23041.1006
GMI 0.88970.85680.84560.85850.87190.89790.93280.95240.98330.9855
AQI 0.91140.88880.94090.98450.97560.96650.9750.9250.77410.7779
SGI 1.04581.04971.03170.99080.93760.91240.92490.9380.97180.9723
DEPI 1.09561.11920.99821.04021.07391.10731.13521.13891.15231.1273
SGAI 0.98220.97911.04251.08591.11591.10221.06021.061.05281.0601
LVGI 0.91350.90250.95470.93820.93160.94960.93650.95911.23871.2389
TATA -0.0854-0.0965-0.0958-0.0936-0.0859-0.0833-0.0768-0.0769-0.0628-0.072
M-score -2.96-3.17-3.20-3.11-3.07-2.81-2.68-2.71-2.76-2.92
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