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GuruFocus has detected 3 Warning Signs with SandRidge Energy Inc $SD.
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SandRidge Energy Inc (NYSE:SD)
Beneish M-Score
0.00 (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.

SandRidge Energy Inc has a M-score of -4.18 suggests that the company is not a manipulator.

During the past 13 years, the highest Beneish M-Score of SandRidge Energy Inc was 0.00. The lowest was -11.64. And the median was -2.50.


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 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+0.528 * 1.023+0.404 * 0+0.892 * 0.5103+0.115 * 0.1412
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.0439+4.679 * -0.327 * 0
=-4.18

* 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 $0.0 Mil.
Revenue was 98.456 + 104.056 + 99.421 + 90.332 = $392.3 Mil.
Gross Profit was 70.816 + 61.575 + 53.387 + 35.99 = $221.8 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $0.0 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $145.8 Mil.
Selling, General & Admin. Expense(SGA) was $156.6 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -333.982 + -404.337 + -515.911 + -313.226 = $-1,567.5 Mil.
Non Operating Income was 3.881 + -43.406 + -198.993 + 41.484 = $-197.0 Mil.
Cash Flow from Operations was 65.595 + 26.964 + 23.603 + -162.644 = $-46.5 Mil.
Accounts Receivable was $63.6 Mil.
Revenue was 143.642 + 180.152 + 229.607 + 215.308 = $768.7 Mil.
Gross Profit was 120.705 + 92.66 + 130.841 + 100.362 = $444.6 Mil.
Total Current Assets was $674.1 Mil.
Total Assets was $2,922.0 Mil.
Property, Plant and Equipment(Net PPE) was $2,234.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $367.3 Mil.
Selling, General & Admin. Expense(SGA) was $150.2 Mil.
Total Current Liabilities was $437.4 Mil.
Long-Term Debt was $3,562.4 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)
=(0 / 392.265) / (63.557 / 768.709)
=0 / 0.08268018
=0

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)
=(444.568 / 768.709) / (221.768 / 392.265)
=0.57833068 / 0.5653525
=1.023

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 - (0 + 0) / 0) / (1 - (674.088 + 2234.702) / 2922.027)
= / 0.00453007
=0

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
=392.265 / 768.709
=0.5103

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))
=(367.295 / (367.295 + 2234.702)) / (145.829 / (145.829 + 0))
=0.14115889 / 1
=0.1412

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)
=(156.618 / 392.265) / (150.166 / 768.709)
=0.3992658 / 0.1953483
=2.0439

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 + 0) / 0) / ((3562.378 + 437.389) / 2922.027)
= / 1.36883301
=0

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
=(-1567.456 - -197.034 - -46.482) / 0
=

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 -4.18 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.

SandRidge Energy Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.68860.54481.70410.98130.70182.09020.40991.1150.79911.3371
GMI 1.00790.96871.26480.87980.9170.961.02660.86551.310.991
AQI 0.55641.84030.96491.88651.01440.27461.02681.66070.15491.2828
SGI 1.74491.74450.50011.57641.51891.3671.02520.78590.49320.5103
DEPI 0.3740.66461.1981.36010.97390.93260.76041.23320.52160.9329
SGAI 0.20741.01481.83291.13620.5451.18941.33360.47312.47832.0439
LVGI 0.70452.13551.33610.65260.86050.98580.96141.02052.49670.3506
TATA -0.0859-0.5536-0.7537-0.0369-0.0508-0.0782-0.1761-0.0512-1.6137-1.2266
M-score -2.52-4.91-5.91-1.73-2.45-1.87-3.87-2.50-11.64-8.21

SandRidge Energy Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.03881.1151.51341.06841.03460.79910.48690.79380.6888
GMI 0.95870.86550.89730.97011.02731.311.24841.19591.0819
AQI 0.72921.66071.96392.66952.9090.15490.23320.16740.1725
SGI 0.8140.78590.69510.66760.57960.49320.48360.4330.4501
DEPI 1.21571.23321.21340.820.61930.52160.57510.85871.0015
SGAI 0.43440.47310.59861.28341.77472.47833.23163.29152.8605
LVGI 1.04231.02051.18391.60531.95022.49672.51620.03620.0746
TATA -0.0931-0.0519-0.2101-0.4996-0.91-1.6137-1.4696-1.1182-0.9916
M-score -3.07-2.50-2.89-4.66-6.78-11.64-11.40-8.74-8.20
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