Switch to:
GuruFocus has detected 7 Warning Signs with Schlumberger Ltd $SLB.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Schlumberger Ltd (NYSE:SLB)
Beneish M-Score
-2.20 (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 -2.20 signals that the company is a manipulator.

SLB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.46   Max: -2
Current: -2.2

-3.46
-2

During the past 13 years, the highest Beneish M-Score of Schlumberger Ltd was -2.00. The lowest was -3.46. And the median was -2.48.


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 * 1.3631+0.528 * 1.4858+0.404 * 1.2988+0.892 * 0.7844+0.115 * 0.9632
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0422+4.679 * -0.0504-0.327 * 0.9627
=-2.20

* 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 $9,387 Mil.
Revenue was 7154 + 7073 + 7218 + 6565 = $28,010 Mil.
Gross Profit was 961 + 931 + 903 + 1105 = $3,900 Mil.
Total Current Assets was $23,927 Mil.
Total Assets was $77,956 Mil.
Property, Plant and Equipment(Net PPE) was $12,821 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,094 Mil.
Selling, General & Admin. Expense(SGA) was $403 Mil.
Total Current Liabilities was $15,059 Mil.
Long-Term Debt was $16,463 Mil.
Net Income was -205 + 176 + -2160 + 501 = $-1,688 Mil.
Non Operating Income was -723 + -291 + -2962 + -45 = $-4,021 Mil.
Cash Flow from Operations was 2013 + 1406 + 1632 + 1210 = $6,261 Mil.
Accounts Receivable was $8,780 Mil.
Revenue was 7825 + 8532 + 9057 + 10297 = $35,711 Mil.
Gross Profit was 1532 + 1734 + 1921 + 2201 = $7,388 Mil.
Total Current Assets was $26,912 Mil.
Total Assets was $68,005 Mil.
Property, Plant and Equipment(Net PPE) was $13,415 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,078 Mil.
Selling, General & Admin. Expense(SGA) was $493 Mil.
Total Current Liabilities was $14,121 Mil.
Long-Term Debt was $14,442 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)
=(9387 / 28010) / (8780 / 35711)
=0.33513031 / 0.24586262
=1.3631

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)
=(7388 / 35711) / (3900 / 28010)
=0.20688303 / 0.13923599
=1.4858

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 - (23927 + 12821) / 77956) / (1 - (26912 + 13415) / 68005)
=0.52860588 / 0.40699949
=1.2988

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
=28010 / 35711
=0.7844

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))
=(4078 / (4078 + 13415)) / (4094 / (4094 + 12821))
=0.23312182 / 0.2420337
=0.9632

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)
=(403 / 28010) / (493 / 35711)
=0.01438772 / 0.01380527
=1.0422

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)
=((16463 + 15059) / 77956) / ((14442 + 14121) / 68005)
=0.4043563 / 0.42001323
=0.9627

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
=(-1688 - -4021 - 6261) / 77956
=-0.0504

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 -2.20 signals that the company is likely to 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

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.02511.00361.16761.08780.89781.04670.91350.92371.07561.3631
GMI 0.90171.11021.25311.04191.11131.00090.89851.02031.13441.4862
AQI 0.89280.93181.0321.37490.94090.93591.04581.04321.01551.2988
SGI 1.23281.16310.83321.24991.27831.14151.10871.05190.73070.7844
DEPI 1.11531.03380.92991.09660.92441.01690.96820.97320.90110.9632
SGAI 0.96990.83851.09950.46511.04890.85080.92641.08551.42331.0401
LVGI 0.8330.91070.93940.91181.0931.02761.00281.03741.13580.9627
TATA -0.034-0.0329-0.0569-0.0237-0.0136-0.0201-0.0497-0.0552-0.0577-0.0504
M-score -2.43-2.39-2.60-1.98-2.40-2.41-2.72-2.76-2.97-2.20

Schlumberger Ltd Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.9710.92370.88140.82050.89941.07561.2011.45581.44471.3631
GMI 1.02351.021.05071.01241.05831.13521.17981.29891.40281.4858
AQI 1.02261.04321.04451.0561.08731.01550.99181.2021.1871.2988
SGI 1.05511.05191.01440.9520.84360.73070.66830.67290.70650.7844
DEPI 1.04190.97320.97220.91630.90810.90110.92530.93480.94110.9632
SGAI 1.05941.08781.12891.13451.23131.41741.48111.4281.28071.0422
LVGI 1.00981.03741.03991.0030.96551.13581.21381.14551.18860.9627
TATA -0.0642-0.0562-0.0586-0.0657-0.0744-0.0577-0.0619-0.0488-0.0423-0.0504
M-score -2.74-2.77-2.84-3.00-3.03-2.97-2.95-2.47-2.36-2.20
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK