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Schlumberger Ltd (NYSE:SLB)
Beneish M-Score
-2.44 (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 -2.44 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: -2.44

-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 -2.54.


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 * 1.4558+0.528 * 1.2989+0.404 * 1.202+0.892 * 0.6729+0.115 * 0.9348
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.428+4.679 * -0.0434-0.327 * 1.1455
=-2.44

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $9,374 Mil.
Revenue was 7218 + 6565 + 7825 + 8532 = $30,140 Mil.
Gross Profit was 903 + 1105 + 1532 + 1734 = $5,274 Mil.
Total Current Assets was $27,195 Mil.
Total Assets was $81,171 Mil.
Property, Plant and Equipment(Net PPE) was $13,226 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,069 Mil.
Selling, General & Admin. Expense(SGA) was $467 Mil.
Total Current Liabilities was $14,609 Mil.
Long-Term Debt was $18,252 Mil.
Net Income was -2160 + 501 + -1016 + 989 = $-1,686 Mil.
Non Operating Income was -2962 + -45 + -2656 + -60 = $-5,723 Mil.
Cash Flow from Operations was 1632 + 1210 + 2178 + 2543 = $7,563 Mil.
Accounts Receivable was $9,569 Mil.
Revenue was 9057 + 10297 + 12712 + 12725 = $44,791 Mil.
Gross Profit was 1921 + 2201 + 3022 + 3036 = $10,180 Mil.
Total Current Assets was $22,861 Mil.
Total Assets was $64,753 Mil.
Property, Plant and Equipment(Net PPE) was $14,848 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,186 Mil.
Selling, General & Admin. Expense(SGA) was $486 Mil.
Total Current Liabilities was $13,774 Mil.
Long-Term Debt was $9,110 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)
=(9374 / 30140) / (9569 / 44791)
=0.31101526 / 0.21363667
=1.4558

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)
=(10180 / 44791) / (5274 / 30140)
=0.2272778 / 0.17498341
=1.2989

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 - (27195 + 13226) / 81171) / (1 - (22861 + 14848) / 64753)
=0.50202659 / 0.4176486
=1.202

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
=30140 / 44791
=0.6729

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))
=(4186 / (4186 + 14848)) / (4069 / (4069 + 13226))
=0.21992224 / 0.23527031
=0.9348

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)
=(467 / 30140) / (486 / 44791)
=0.01549436 / 0.01085039
=1.428

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)
=((18252 + 14609) / 81171) / ((9110 + 13774) / 64753)
=0.4048367 / 0.35340448
=1.1455

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
=(-1686 - -5723 - 7563) / 81171
=-0.0434

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 -2.44 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 -0.0469-0.034-0.0329-0.0569-0.0196-0.0212-0.0187-0.0431-0.0556-0.0577
M-score -2.43-2.43-2.39-2.60-2.08-2.24-2.44-2.68-2.77-2.97

Schlumberger Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.92691.03450.9750.92570.88140.82050.89941.07561.2011.4558
GMI 0.89241.02511.03131.02381.05071.01241.05831.13521.17981.2989
AQI 1.05561.01241.02261.04321.04451.0561.08731.01550.99181.202
SGI 1.09561.05021.05071.04971.01440.9520.84360.73070.66830.6729
DEPI 0.98150.99740.99020.93020.90510.89480.89740.90110.93740.9348
SGAI 0.96951.06861.06391.09011.12891.13451.23131.41741.48111.428
LVGI 1.01361.03411.00981.03741.03991.0030.96551.13581.21381.1455
TATA -0.0458-0.0554-0.0593-0.0556-0.0626-0.0666-0.0753-0.0517-0.0555-0.0434
M-score -2.71-2.67-2.72-2.77-2.87-3.01-3.04-2.94-2.92-2.44
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