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GuruFocus has detected 7 Warning Signs with Entergy Corp $ETR.
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Entergy Corp (NYSE:ETR)
Beneish M-Score
-2.99 (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.

Entergy Corp has a M-score of -2.99 suggests that the company is not a manipulator.

ETR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: -1.52
Current: -2.99

-3.45
-1.52

During the past 13 years, the highest Beneish M-Score of Entergy Corp was -1.52. The lowest was -3.45. And the median was -2.79.


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 Entergy 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 * 0.998+0.528 * 0.9332+0.404 * 1.0753+0.892 * 0.9662+0.115 * 0.9483
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3843+4.679 * -0.083-0.327 * 1.0407
=-2.99

* 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 $500 Mil.
Revenue was 2588.458 + 2648.527 + 3124.703 + 2462.562 = $10,824 Mil.
Gross Profit was 1770.56 + 1792.597 + 2231.931 + 1791.38 = $7,586 Mil.
Total Current Assets was $3,397 Mil.
Total Assets was $45,318 Mil.
Property, Plant and Equipment(Net PPE) was $28,417 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,154 Mil.
Selling, General & Admin. Expense(SGA) was $373 Mil.
Total Current Liabilities was $3,879 Mil.
Long-Term Debt was $13,951 Mil.
Net Income was 86.051 + -1765.538 + 393.204 + 572.59 = $-714 Mil.
Non Operating Income was 33.551 + 3.406 + 8.711 + 5.483 = $51 Mil.
Cash Flow from Operations was 529.393 + 746.304 + 1000.315 + 719.259 = $2,995 Mil.
Accounts Receivable was $518 Mil.
Revenue was 2609.852 + 2508.523 + 3371.406 + 2713.231 = $11,203 Mil.
Gross Profit was 1791.332 + 1649.147 + 2113.596 + 1773.471 = $7,328 Mil.
Total Current Assets was $4,001 Mil.
Total Assets was $45,934 Mil.
Property, Plant and Equipment(Net PPE) was $29,203 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,091 Mil.
Selling, General & Admin. Expense(SGA) was $279 Mil.
Total Current Liabilities was $3,839 Mil.
Long-Term Debt was $13,526 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)
=(499.701 / 10824.25) / (518.207 / 11203.012)
=0.04616495 / 0.04625604
=0.998

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)
=(7327.546 / 11203.012) / (7586.468 / 10824.25)
=0.65406928 / 0.70087701
=0.9332

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 - (3397.491 + 28417.036) / 45318.206) / (1 - (4001.195 + 29203.439) / 45933.882)
=0.2979747 / 0.2771211
=1.0753

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
=10824.25 / 11203.012
=0.9662

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))
=(2091.476 / (2091.476 + 29203.439)) / (2154.416 / (2154.416 + 28417.036))
=0.06683118 / 0.0704715
=0.9483

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)
=(373.171 / 10824.25) / (279.001 / 11203.012)
=0.03447546 / 0.02490411
=1.3843

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)
=((13950.777 + 3879.043) / 45318.206) / ((13526.43 + 3839.348) / 45933.882)
=0.39343614 / 0.37806032
=1.0407

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
=(-713.693 - 51.151 - 2995.271) / 45318.206
=-0.083

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.

Entergy Corp has a M-score of -2.99 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 local exchange's currency.

Entergy Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.01030.75041.41640.82410.80411.09951.2006
GMI 1.03070.9970.93811.04831.0190.95380.9187
AQI 1.05881.06460.98280.9481.07410.99571.0913
SGI 1.0690.97750.91741.10571.09690.92140.942
DEPI 0.87991.03541.05620.90350.97610.97581.001
SGAI 0.9950.94561.0291.18511.02661.11571.2402
LVGI 0.98741.01081.00661.00590.93711.03721.0604
TATA -0.0698-0.0441-0.0493-0.0571-0.0636-0.0764-0.0784
M-score -2.70-2.90-2.44-2.86-2.82-2.88-2.78

Entergy Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.80410.6950.71391.0951.09950.93660.90931.02941.20060.998
GMI 1.0191.01380.98830.96430.95380.94330.93750.91470.91870.9332
AQI 1.07411.08921.07841.06730.99570.97280.97951.0271.09131.0753
SGI 1.09691.0180.97330.9580.92140.91780.91860.90450.9420.9662
DEPI 0.97610.99031.00270.97760.97581.02631.05061.09261.0010.9483
SGAI 1.02661.09261.1141.10171.11571.09851.12181.20221.24021.3843
LVGI 0.93710.94340.95571.01441.03721.08891.07360.98941.06041.0407
TATA -0.0636-0.0626-0.0628-0.0778-0.0764-0.0742-0.0652-0.0392-0.0784-0.083
M-score -2.82-2.99-3.04-2.81-2.88-3.04-3.02-2.78-2.78-2.99
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