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GuruFocus has detected 2 Warning Signs with Broadwind Energy Inc $BWEN.
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Broadwind Energy Inc (NAS:BWEN)
Beneish M-Score
-0.84 (As of Today)

Warning Sign:

Beneish M-Score -0.84 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Broadwind Energy Inc has a M-score of -0.84 signals that the company is a manipulator.

BWEN' s Beneish M-Score Range Over the Past 10 Years
Min: -5.73   Max: 16.14
Current: -0.84

-5.73
16.14

During the past 13 years, the highest Beneish M-Score of Broadwind Energy Inc was 16.14. The lowest was -5.73. And the median was -2.88.


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 Broadwind Energy Inc 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 * 1.9668+0.528 * 0.4273+0.404 * 3.627+0.892 * 0.9667+0.115 * 1.2304
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9628+4.679 * 0.0068-0.327 * 1.1354
=-0.84

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $23.7 Mil.
Revenue was 56.06 + 48.151 + 42.552 + 43.38 = $190.1 Mil.
Gross Profit was 6.374 + 4.704 + 5.331 + 4.142 = $20.6 Mil.
Total Current Assets was $52.4 Mil.
Total Assets was $131.7 Mil.
Property, Plant and Equipment(Net PPE) was $56.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.4 Mil.
Selling, General & Admin. Expense(SGA) was $16.1 Mil.
Total Current Liabilities was $48.9 Mil.
Long-Term Debt was $3.5 Mil.
Net Income was 6.327 + 0.298 + 0.872 + -0.474 = $7.0 Mil.
Non Operating Income was 0 + 0.022 + 0.01 + 0.005 = $0.0 Mil.
Cash Flow from Operations was -8.145 + -0.553 + 16.065 + -1.273 = $6.1 Mil.
Accounts Receivable was $12.5 Mil.
Revenue was 46.757 + 37.573 + 49.791 + 62.563 = $196.7 Mil.
Gross Profit was 3.962 + -6.209 + 2.831 + 8.499 = $9.1 Mil.
Total Current Assets was $51.0 Mil.
Total Assets was $107.7 Mil.
Property, Plant and Equipment(Net PPE) was $51.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.6 Mil.
Selling, General & Admin. Expense(SGA) was $17.3 Mil.
Total Current Liabilities was $35.2 Mil.
Long-Term Debt was $2.6 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)
=(23.69 / 190.143) / (12.459 / 196.684)
=0.12459044 / 0.06334526
=1.9668

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)
=(9.083 / 196.684) / (20.551 / 190.143)
=0.04618068 / 0.10808181
=0.4273

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 - (52.373 + 55.982) / 131.688) / (1 - (51.002 + 51.451) / 107.715)
=0.17718395 / 0.04885113
=3.627

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
=190.143 / 196.684
=0.9667

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))
=(8.58 / (8.58 + 51.451)) / (7.358 / (7.358 + 55.982))
=0.14292615 / 0.11616672
=1.2304

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)
=(16.131 / 190.143) / (17.33 / 196.684)
=0.08483615 / 0.08811088
=0.9628

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)
=((3.518 + 48.94) / 131.688) / ((2.6 + 35.192) / 107.715)
=0.39835065 / 0.35085178
=1.1354

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
=(7.023 - 0.037 - 6.094) / 131.688
=0.0068

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.

Broadwind Energy Inc has a M-score of -0.84 signals that the company is likely to 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 local exchange's currency.

Broadwind Energy Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 11.35270.37180.70221.31960.87010.69830.91320.8470.66781.3355
GMI -1.50270.86072.38374.53150.36761.19190.56690.72721.99240.3938
AQI 4.17890.66110.60690.3040.88380.98490.87431.39460.69210.8469
SGI 7.40847.29170.85030.74081.35761.13371.02371.0740.85970.908
DEPI 1.85830.430.91931.06490.94380.82840.96891.12361.04831.3371
SGAI 0.61710.99540.91781.14090.70740.72510.96690.87421.05710.9516
LVGI 0.16670.76851.03030.97721.02790.83541.50370.94790.95911.1129
TATA -0.0187-0.0598-0.5198-0.3971-0.0675-0.113-0.2482-0.0854-0.1521-0.1447
M-score 13.072.07-4.75-2.70-2.94-2.99-4.14-2.89-3.21-3.30

Broadwind Energy Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.8470.95260.97430.79770.66780.64410.96381.07951.33551.9668
GMI 0.72720.93231.15151.20481.99241.54862.73531.62870.39380.4273
AQI 1.39460.80120.82061.15810.69211.16071.10660.89790.84693.627
SGI 1.0740.96980.88480.88240.85970.88560.82070.80780.9080.9667
DEPI 1.12361.21191.22341.08351.04830.98720.98141.15981.33711.2304
SGAI 0.87420.90230.92330.97211.05711.01911.09141.10530.95160.9628
LVGI 0.94791.0230.98120.90140.95910.94881.09461.28481.11291.1354
TATA -0.0854-0.0632-0.04910.0564-0.1521-0.3245-0.338-0.3328-0.14470.0068
M-score -2.89-2.93-2.78-2.29-3.21-4.06-3.34-3.94-3.30-0.84
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