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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 -2.84.
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 * 0.7262||+||0.528 * 1.0866||+||0.404 * 1.184||+||0.892 * 0.8404||+||0.115 * 0.7753|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2069||+||4.679 * -0.3313||-||0.327 * 1.3555|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $108 Mil.|
Revenue was 214.447 + 255.099 + 378.551 + 400.974 = $1,249 Mil.
Gross Profit was 91.398 + 113.967 + 178.041 + 206.848 = $590 Mil.
Total Current Assets was $167 Mil.
Total Assets was $3,630 Mil.
Property, Plant and Equipment(Net PPE) was $3,376 Mil.
Depreciation, Depletion and Amortization(DDA) was $411 Mil.
Selling, General & Admin. Expense(SGA) was $41 Mil.
Total Current Liabilities was $178 Mil.
Long-Term Debt was $927 Mil.
Net Income was -274.389 + -248.354 + -42.551 + 67.522 = $-498 Mil.
Non Operating Income was -1.895 + 6.584 + 39.308 + 19.773 = $64 Mil.
Cash Flow from Operations was 97.297 + 160.309 + 159.466 + 223.999 = $641 Mil.
|Accounts Receivable was $177 Mil.
Revenue was 405.431 + 387.988 + 359.121 + 333.776 = $1,486 Mil.
Gross Profit was 215.566 + 202.809 + 183.25 + 161.551 = $763 Mil.
Total Current Assets was $211 Mil.
Total Assets was $4,278 Mil.
Property, Plant and Equipment(Net PPE) was $3,980 Mil.
Depreciation, Depletion and Amortization(DDA) was $365 Mil.
Selling, General & Admin. Expense(SGA) was $40 Mil.
Total Current Liabilities was $315 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)|
|=||(108.109 / 1249.071)||/||(177.149 / 1486.316)|
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)|
|=||(113.967 / 1486.316)||/||(91.398 / 1249.071)|
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 - (166.534 + 3376.296) / 3629.993)||/||(1 - (211.266 + 3979.665) / 4277.682)|
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))|
|=||(365.351 / (365.351 + 3979.665))||/||(410.706 / (410.706 + 3376.296))|
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)|
|=||(40.78 / 1249.071)||/||(40.208 / 1486.316)|
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)|
|=||((926.908 + 177.9) / 3629.993)||/||((645.925 + 314.55) / 4277.682)|
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|
|=||(-497.772 - 63.77||-||641.071)||/||3629.993|
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 -4.48 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