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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.
During the past 14 years, the highest Beneish M-Score of SandRidge Energy Inc was 0.00. The lowest was -11.12. And the median was -2.46.
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 SandRidge Energy Inc 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 * 0.6888||+||0.528 * 1.1167||+||0.404 * 0.1725||+||0.892 * 0.4501||+||0.115 * 1.0015|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.8605||+||4.679 * -1.0167||-||0.327 * 0.0746|
* 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 $61.4 Mil.|
Revenue was 104.056 + 99.421 + 90.332 + 143.642 = $437.5 Mil.
Gross Profit was 61.575 + 53.387 + 35.99 + 69.492 = $220.4 Mil.
Total Current Assets was $737.8 Mil.
Total Assets was $1,886.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,136.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $171.1 Mil.
Selling, General & Admin. Expense(SGA) was $175.8 Mil.
Total Current Liabilities was $152.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -404.337 + -515.911 + -313.226 + -653.698 = $-1,887.2 Mil.
Non Operating Income was -43.652 + -198.993 + 41.484 + 283.33 = $82.2 Mil.
Cash Flow from Operations was 75.002 + 23.603 + -162.644 + 12.651 = $-51.4 Mil.
|Accounts Receivable was $198.2 Mil.
Revenue was 180.152 + 229.607 + 215.308 + 346.881 = $971.9 Mil.
Gross Profit was 92.66 + 130.841 + 100.362 + 223.103 = $547.0 Mil.
Total Current Assets was $1,109.0 Mil.
Total Assets was $4,103.1 Mil.
Property, Plant and Equipment(Net PPE) was $2,835.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $427.7 Mil.
Selling, General & Admin. Expense(SGA) was $136.6 Mil.
Total Current Liabilities was $496.5 Mil.
Long-Term Debt was $3,937.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(61.446 / 437.451)||/||(198.205 / 971.948)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(546.966 / 971.948)||/||(220.444 / 437.451)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (737.835 + 1136.062) / 1886.504)||/||(1 - (1108.997 + 2835.086) / 4103.082)|
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.
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))|
|=||(427.7 / (427.7 + 2835.086))||/||(171.091 / (171.091 + 1136.062))|
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)|
|=||(175.849 / 437.451)||/||(136.587 / 971.948)|
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)|
|=||((0 + 152.003) / 1886.504)||/||((3936.994 + 496.54) / 4103.082)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-1887.172 - 82.169||-||-51.388)||/||1886.504|
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.
SandRidge Energy Inc has a M-score of -8.30 suggests that the company will not be a manipulator.
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
SandRidge Energy Inc Annual Data
SandRidge Energy Inc Quarterly Data