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Unit Corp (NYSE:UNT)
Beneish M-Score
-2.72 (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.

Unit Corp has a M-score of -2.72 suggests that the company is not a manipulator.

UNT' s 10-Year Beneish M-Score Range
Min: -4.79   Max: 14.85
Current: -2.72

-4.79
14.85

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 -2.78.


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 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 * 1.132+0.528 * 1.0233+0.404 * 0.9259+0.892 * 1.0936+0.115 * 0.9894
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0337+4.679 * -0.0962-0.327 * 0.9079
=-2.72

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $188 Mil.
Revenue was 387.988 + 359.121 + 333.776 + 340.421 = $1,421 Mil.
Gross Profit was 202.809 + 183.25 + 161.551 + 172.28 = $720 Mil.
Total Current Assets was $223 Mil.
Total Assets was $4,117 Mil.
Property, Plant and Equipment(Net PPE) was $3,806 Mil.
Depreciation, Depletion and Amortization(DDA) was $345 Mil.
Selling, General & Admin. Expense(SGA) was $39 Mil.
Total Current Liabilities was $263 Mil.
Long-Term Debt was $646 Mil.
Net Income was 56.945 + 51.301 + 34.232 + 59.007 = $201 Mil.
Non Operating Income was -18.246 + -5.038 + -13.774 + 16.253 = $-21 Mil.
Cash Flow from Operations was 123.46 + 173.37 + 183.073 + 138.228 = $618 Mil.
Accounts Receivable was $152 Mil.
Revenue was 318.532 + 331.582 + 321.79 + 327.785 = $1,300 Mil.
Gross Profit was 160.082 + 169.812 + 166.388 + 177.324 = $674 Mil.
Total Current Assets was $190 Mil.
Total Assets was $3,815 Mil.
Property, Plant and Equipment(Net PPE) was $3,538 Mil.
Depreciation, Depletion and Amortization(DDA) was $317 Mil.
Selling, General & Admin. Expense(SGA) was $35 Mil.
Total Current Liabilities was $212 Mil.
Long-Term Debt was $715 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)
=(187.872 / 1421.306) / (151.77 / 1299.689)
=0.13218265 / 0.11677409
=1.132

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)
=(183.25 / 1299.689) / (202.809 / 1421.306)
=0.51828245 / 0.50649895
=1.0233

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 - (223.263 + 3805.9) / 4116.836) / (1 - (189.575 + 3537.524) / 3814.84)
=0.02129621 / 0.02299992
=0.9259

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
=1421.306 / 1299.689
=1.0936

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))
=(317.13 / (317.13 + 3537.524)) / (345.183 / (345.183 + 3805.9))
=0.08227198 / 0.08315493
=0.9894

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)
=(39.287 / 1421.306) / (34.755 / 1299.689)
=0.02764148 / 0.02674101
=1.0337

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)
=((645.809 + 263.237) / 4116.836) / ((715.365 + 212.454) / 3814.84)
=0.22081181 / 0.24321308
=0.9079

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
=(201.485 - -20.805 - 618.131) / 4116.836
=-0.0962

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 -2.72 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.

Unit Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.9181.25690.76440.82571.05610.83971.41340.76710.81630.9254
GMI 0.98580.87860.90121.06180.95921.03231.05941.00220.99951.0445
AQI 0.89331.00091.20970.88040.87231.0730.78280.86610.88940.9288
SGI 1.72281.70571.31250.99691.1720.52271.22651.38691.08911.0279
DEPI 0.89440.98880.9121.0440.92961.23781.0270.90491.03551.0209
SGAI 0.75450.70150.99281.18270.98421.80710.8880.82871.01081.1268
LVGI 2.30451.29190.82040.70391.21770.39551.91581.35511.55950.9004
TATA -0.111-0.07-0.101-0.1415-0.2116-0.245-0.0954-0.127-0.1772-0.1196
M-score -2.88-2.05-2.81-3.25-3.41-4.07-2.68-3.09-3.62-3.08

Unit Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.76710.75860.76560.8060.81630.91021.00470.8940.92541.132
GMI 1.00221.02181.03061.02510.99951.00091.02041.03651.04451.0233
AQI 0.86610.86620.91030.70940.88940.94210.8840.94870.92880.9259
SGI 1.38691.41971.33251.2031.08911.00430.98640.9971.02791.0936
DEPI 0.90490.90810.90031.04811.03551.09051.170.99321.02090.9894
SGAI 0.82870.79390.8380.90911.01081.14711.17741.18911.12681.0337
LVGI 1.35511.16341.16011.52941.55951.61221.4740.95470.90040.9079
TATA -0.127-0.1284-0.157-0.1487-0.1773-0.1852-0.1575-0.1536-0.1196-0.0962
M-score -3.09-3.00-3.19-3.43-3.62-3.66-3.43-3.32-3.08-2.72
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