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Schlumberger Ltd (NYSE:SLB)
Beneish M-Score
-2.36 (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.

Schlumberger Ltd has a M-score of -2.36 suggests that the company is not a manipulator.

SLB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86   Max: -1.67
Current: -2.36

-3.86
-1.67

During the past 13 years, the highest Beneish M-Score of Schlumberger Ltd was -1.67. The lowest was -3.86. And the median was -2.52.


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 Schlumberger 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 * 1.4447+0.528 * 1.4028+0.404 * 1.187+0.892 * 0.7065+0.115 * 0.9411
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2807+4.679 * -0.0423-0.327 * 1.1886
=-2.36

* 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 $9,565 Mil.
Revenue was 7073 + 7218 + 6565 + 7825 = $28,681 Mil.
Gross Profit was 931 + 903 + 1105 + 1532 = $4,471 Mil.
Total Current Assets was $26,425 Mil.
Total Assets was $80,594 Mil.
Property, Plant and Equipment(Net PPE) was $13,004 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,041 Mil.
Selling, General & Admin. Expense(SGA) was $437 Mil.
Total Current Liabilities was $14,972 Mil.
Long-Term Debt was $17,538 Mil.
Net Income was 176 + -2160 + 501 + -1016 = $-2,499 Mil.
Non Operating Income was -291 + -2962 + -45 + -2217 = $-5,515 Mil.
Cash Flow from Operations was 1406 + 1632 + 1210 + 2178 = $6,426 Mil.
Accounts Receivable was $9,372 Mil.
Revenue was 8532 + 9057 + 10297 + 12712 = $40,598 Mil.
Gross Profit was 1734 + 1921 + 2201 + 3022 = $8,878 Mil.
Total Current Assets was $21,532 Mil.
Total Assets was $63,342 Mil.
Property, Plant and Equipment(Net PPE) was $14,554 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,180 Mil.
Selling, General & Admin. Expense(SGA) was $483 Mil.
Total Current Liabilities was $14,010 Mil.
Long-Term Debt was $7,487 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)
=(9565 / 28681) / (9372 / 40598)
=0.33349604 / 0.23084881
=1.4447

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)
=(8878 / 40598) / (4471 / 28681)
=0.21868072 / 0.15588717
=1.4028

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 - (26425 + 13004) / 80594) / (1 - (21532 + 14554) / 63342)
=0.51077003 / 0.43029901
=1.187

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
=28681 / 40598
=0.7065

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))
=(4180 / (4180 + 14554)) / (4041 / (4041 + 13004))
=0.22312373 / 0.23707832
=0.9411

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)
=(437 / 28681) / (483 / 40598)
=0.01523657 / 0.01189714
=1.2807

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)
=((17538 + 14972) / 80594) / ((7487 + 14010) / 63342)
=0.4033799 / 0.33937987
=1.1886

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
=(-2499 - -5515 - 6426) / 80594
=-0.0423

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.

Schlumberger Ltd has a M-score of -2.36 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.

Schlumberger Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.93281.02511.00361.16761.08780.89781.04670.91350.92371.0756
GMI 0.81970.90171.11021.25311.04191.11131.00090.89851.02031.1344
AQI 1.20040.89280.93181.0321.37490.94090.93591.04581.04321.0155
SGI 1.34391.23281.16310.83321.24991.27831.14151.10871.05190.7307
DEPI 1.11241.11531.03380.92991.09660.92441.01690.96820.97320.9011
SGAI 0.9240.96990.83851.09950.46511.04890.85080.92641.08551.4233
LVGI 0.97550.8330.91070.93940.91181.0931.02761.00281.03741.1358
TATA -0.0469-0.034-0.0329-0.0569-0.0237-0.0136-0.0201-0.0497-0.0552-0.0577
M-score -2.43-2.43-2.39-2.60-1.98-2.40-2.41-2.72-2.76-2.97

Schlumberger Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.02760.9710.92370.88140.82050.89941.07561.2011.45581.4447
GMI 1.01411.02351.021.05071.01241.05831.13521.17981.29891.4028
AQI 1.01241.02261.04321.04451.0561.08731.01550.99181.2021.187
SGI 1.05721.05511.05191.01440.9520.84360.73070.66830.67290.7065
DEPI 1.02641.04190.97320.97220.91630.90810.90110.92530.93480.9411
SGAI 1.06141.05941.08781.12891.13451.23131.41741.48111.4281.2807
LVGI 1.03411.00981.03741.03991.0030.96551.13581.21381.14551.1886
TATA -0.0642-0.0642-0.0562-0.0586-0.0657-0.0744-0.0577-0.0619-0.0488-0.0423
M-score -2.71-2.74-2.77-2.84-3.00-3.03-2.97-2.95-2.47-2.36
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