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Schlumberger Ltd (NYSE:SLB)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

SLB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.13   Max: -2.15
Current: -3.06

-3.13
-2.15

During the past 13 years, the highest Beneish M-Score of Schlumberger Ltd was -2.15. The lowest was -3.13. And the median was -2.66.


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 * 0.8994+0.528 * 1.0583+0.404 * 1.0873+0.892 * 0.8436+0.115 * 0.8974
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2313+4.679 * -0.0801-0.327 * 0.9655
=-3.06

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 989 + 1124 + 975 + 302 = $3,390 Mil.
Non Operating Income was -60 + -47 + -439 + -1553 = $-2,099 Mil.
Cash Flow from Operations was 2543 + 2314 + 1770 + 3937 = $10,564 Mil.
Accounts Receivable was $12,352 Mil.
Revenue was 12725 + 12118 + 11315 + 11966 = $48,124 Mil.
Gross Profit was 3036 + 2849 + 2570 + 2682 = $11,137 Mil.
Total Current Assets was $25,473 Mil.
Total Assets was $68,320 Mil.
Property, Plant and Equipment(Net PPE) was $15,809 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,958 Mil.
Selling, General & Admin. Expense(SGA) was $465 Mil.
Total Current Liabilities was $12,388 Mil.
Long-Term Debt was $11,626 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)
=(9372 / 40598) / (12352 / 48124)
=0.23084881 / 0.25667027
=0.8994

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)
=(1921 / 48124) / (1734 / 40598)
=0.23142299 / 0.21868072
=1.0583

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 - (21532 + 14554) / 63342) / (1 - (25473 + 15809) / 68320)
=0.43029901 / 0.39575527
=1.0873

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
=40598 / 48124
=0.8436

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))
=(3958 / (3958 + 15809)) / (4180 / (4180 + 14554))
=0.20023271 / 0.22312373
=0.8974

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)
=(483 / 40598) / (465 / 48124)
=0.01189714 / 0.00966254
=1.2313

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)
=((7487 + 14010) / 63342) / ((11626 + 12388) / 68320)
=0.33937987 / 0.35149297
=0.9655

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
=(3390 - -2099 - 10564) / 63342
=-0.0801

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 -3.06 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.

Schlumberger Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.93281.02511.00361.16761.07980.83971.11630.92260.92371.0756
GMI 0.81970.90171.11021.25310.97091.25060.93830.9141.02031.1344
AQI 1.20040.89280.93181.0321.37490.94090.93591.04581.04321.0155
SGI 1.34391.23281.16310.83321.25921.36671.07031.09781.05190.7307
DEPI 1.11241.11531.03380.92991.09660.92281.0530.97990.93020.9011
SGAI 0.9240.96990.83851.09950.96480.48070.88620.93571.08551.4233
LVGI 0.97550.8330.91070.93940.91181.0931.02761.00281.03741.1358
TATA -0.0492-0.034-0.0329-0.0569-0.0196-0.0212-0.0187-0.0431-0.0599-0.0611
M-score -2.45-2.43-2.39-2.60-2.08-2.24-2.44-2.68-2.79-2.99

Schlumberger Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.98130.93570.92691.03450.9750.92570.88140.82050.89941.0756
GMI 0.89480.89890.89241.02511.03131.02381.05071.01241.05831.1352
AQI 1.02761.04581.05561.01241.02261.04321.04451.0561.08731.0155
SGI 1.07311.08241.09561.05021.05071.04971.01440.9520.84360.7307
DEPI 0.98690.97990.98150.99740.99020.93020.90510.89480.89740.9011
SGAI 0.9940.96080.96951.06861.06391.09011.12891.13451.23131.4174
LVGI 0.98861.00281.01361.03411.00981.03741.03991.0030.96551.1358
TATA -0.0398-0.0434-0.0458-0.0554-0.0593-0.0599-0.0672-0.0713-0.0801-0.0554
M-score -2.66-2.70-2.71-2.67-2.72-2.79-2.89-3.03-3.06-2.96
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