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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 Unit Corp was 14.85. The lowest was -4.79. And the median was -2.80.
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 Unit Corp 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 * 1.0788||+||0.528 * 0.963||+||0.404 * 0.8638||+||0.892 * 1.1731||+||0.115 * 0.9612|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9179||+||4.679 * -0.108||-||0.327 * 1.0403|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $179 Mil.|
Revenue was 400.974 + 405.431 + 387.988 + 359.121 = $1,554 Mil.
Gross Profit was 206.848 + 215.566 + 202.809 + 183.25 = $808 Mil.
Total Current Assets was $220 Mil.
Total Assets was $4,432 Mil.
Property, Plant and Equipment(Net PPE) was $4,125 Mil.
Depreciation, Depletion and Amortization(DDA) was $386 Mil.
Selling, General & Admin. Expense(SGA) was $40 Mil.
Total Current Liabilities was $351 Mil.
Long-Term Debt was $677 Mil.
Net Income was 67.522 + 54.36 + 56.945 + 51.301 = $230 Mil.
Non Operating Income was 19.773 + -10.758 + -18.246 + -5.038 = $-14 Mil.
Cash Flow from Operations was 223.999 + 202.068 + 123.46 + 173.37 = $723 Mil.
|Accounts Receivable was $142 Mil.
Revenue was 333.776 + 340.421 + 318.532 + 331.582 = $1,324 Mil.
Gross Profit was 161.551 + 172.28 + 160.082 + 169.812 = $664 Mil.
Total Current Assets was $182 Mil.
Total Assets was $3,925 Mil.
Property, Plant and Equipment(Net PPE) was $3,654 Mil.
Depreciation, Depletion and Amortization(DDA) was $327 Mil.
Selling, General & Admin. Expense(SGA) was $38 Mil.
Total Current Liabilities was $230 Mil.
Long-Term Debt was $646 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)|
|=||(179.464 / 1553.514)||/||(141.817 / 1324.311)|
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)|
|=||(215.566 / 1324.311)||/||(206.848 / 1553.514)|
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 - (220.127 + 4124.648) / 4431.811)||/||(1 - (181.575 + 3653.892) / 3924.695)|
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))|
|=||(327.261 / (327.261 + 3653.892))||/||(385.729 / (385.729 + 4124.648))|
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)|
|=||(40.444 / 1553.514)||/||(37.56 / 1324.311)|
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)|
|=||((676.843 + 351.339) / 4431.811)||/||((645.584 + 229.655) / 3924.695)|
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|
|=||(230.128 - -14.269||-||722.897)||/||4431.811|
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.
Unit Corp has a M-score of -2.84 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
Unit Corp Annual Data
Unit Corp Quarterly Data