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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.
During the past 13 years, the highest Beneish M-Score of Schlumberger NV was -2.00. The lowest was -3.41. And the median was -2.44.
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 NV 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 * 0.9237||+||0.528 * 1.02||+||0.404 * 1.0432||+||0.892 * 1.0519||+||0.115 * 0.9732|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0878||+||4.679 * -0.0596||-||0.327 * 1.0374|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $11,171 Mil.|
Revenue was 12712 + 12725 + 12118 + 11315 = $48,870 Mil.
Gross Profit was 3022 + 3036 + 2849 + 2570 = $11,477 Mil.
Total Current Assets was $24,694 Mil.
Total Assets was $66,904 Mil.
Property, Plant and Equipment(Net PPE) was $15,396 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,094 Mil.
Selling, General & Admin. Expense(SGA) was $476 Mil.
Total Current Liabilities was $14,176 Mil.
Long-Term Debt was $10,565 Mil.
Net Income was 302 + 1949 + 1595 + 1592 = $5,438 Mil.
Non Operating Income was -1553 + -79 + -64 + -76 = $-1,772 Mil.
Cash Flow from Operations was 3913 + 3063 + 2584 + 1635 = $11,195 Mil.
|Accounts Receivable was $11,497 Mil.
Revenue was 11966 + 11651 + 12240 + 10603 = $46,460 Mil.
Gross Profit was 2682 + 2725 + 3528 + 2194 = $11,129 Mil.
Total Current Assets was $26,225 Mil.
Total Assets was $67,100 Mil.
Property, Plant and Equipment(Net PPE) was $15,096 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,879 Mil.
Selling, General & Admin. Expense(SGA) was $416 Mil.
Total Current Liabilities was $13,525 Mil.
Long-Term Debt was $10,393 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(11171 / 48870)||/||(11497 / 46460)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(3036 / 46460)||/||(3022 / 48870)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (24694 + 15396) / 66904)||/||(1 - (26225 + 15096) / 67100)|
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.
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))|
|=||(3879 / (3879 + 15096))||/||(4094 / (4094 + 15396))|
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)|
|=||(476 / 48870)||/||(416 / 46460)|
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)|
|=||((10565 + 14176) / 66904)||/||((10393 + 13525) / 67100)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(5438 - -1772||-||11195)||/||66904|
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 NV has a M-score of -2.79 suggests that the company will not be a manipulator.
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
Schlumberger NV Annual Data
Schlumberger NV Quarterly Data