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GuruFocus has detected 2 Warning Signs with Noble Corp PLC $NE.
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Noble Corp PLC (NYSE:NE)
Beneish M-Score
-4.06 (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.

Noble Corp PLC has a M-score of -4.06 suggests that the company is not a manipulator.

NE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.06   Max: 9.08
Current: -4.06

-4.06
9.08

During the past 13 years, the highest Beneish M-Score of Noble Corp PLC was 9.08. The lowest was -4.06. And the median was -2.63.


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 Noble Corp PLC 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 * 0.8684+0.528 * 1.0205+0.404 * 0.9535+0.892 * 0.6497+0.115 * 0.9254
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3936+4.679 * -0.2228-0.327 * 1.0699
=-4.06

* 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 $286 Mil.
Revenue was 362.976 + 410.156 + 385.153 + 894.783 = $2,053 Mil.
Gross Profit was 197.445 + 227.293 + 168.807 + 636.309 = $1,230 Mil.
Total Current Assets was $964 Mil.
Total Assets was $11,006 Mil.
Property, Plant and Equipment(Net PPE) was $9,944 Mil.
Depreciation, Depletion and Amortization(DDA) was $597 Mil.
Selling, General & Admin. Expense(SGA) was $66 Mil.
Total Current Liabilities was $550 Mil.
Long-Term Debt was $3,793 Mil.
Net Income was -301.694 + -1302.85 + -55.081 + 322.866 = $-1,337 Mil.
Non Operating Income was 0 + 6.748 + 0 + 11.066 = $18 Mil.
Cash Flow from Operations was 141.873 + 165.607 + 101.118 + 689.119 = $1,098 Mil.
Accounts Receivable was $506 Mil.
Revenue was 611.973 + 857.684 + 896.671 + 793.555 = $3,160 Mil.
Gross Profit was 344.719 + 544.495 + 585.821 + 456.696 = $1,932 Mil.
Total Current Assets was $952 Mil.
Total Assets was $12,455 Mil.
Property, Plant and Equipment(Net PPE) was $11,388 Mil.
Depreciation, Depletion and Amortization(DDA) was $630 Mil.
Selling, General & Admin. Expense(SGA) was $72 Mil.
Total Current Liabilities was $729 Mil.
Long-Term Debt was $3,864 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)
=(285.522 / 2053.068) / (506.017 / 3159.883)
=0.13907089 / 0.16013789
=0.8684

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)
=(1931.731 / 3159.883) / (1229.854 / 2053.068)
=0.61132991 / 0.59903228
=1.0205

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 - (964.484 + 9944.398) / 11005.966) / (1 - (952.019 + 11387.676) / 12454.912)
=0.00882103 / 0.00925073
=0.9535

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
=2053.068 / 3159.883
=0.6497

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))
=(629.886 / (629.886 + 11387.676)) / (597.066 / (597.066 + 9944.398))
=0.05241379 / 0.05663976
=0.9254

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)
=(65.598 / 2053.068) / (72.445 / 3159.883)
=0.03195121 / 0.02292648
=1.3936

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)
=((3792.52 + 549.913) / 11005.966) / ((3864.06 + 728.952) / 12454.912)
=0.39455265 / 0.36877113
=1.0699

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
=(-1336.759 - 17.814 - 1097.717) / 11005.966
=-0.2228

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.

Noble Corp PLC has a M-score of -4.06 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.

Noble Corp PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.05310.91410.95050.77611.57821.55150.83740.62220.84540.9315
GMI 0.92950.92870.96561.26031.21910.86331.04590.97210.84281.022
AQI 1.08940.82511.07710.91780.74090.83690.87611.11540.59421.4757
SGI 1.42621.15061.05640.7710.96030.81631.5240.96381.0370.6867
DEPI 1.07010.96911.02471.13710.990.93580.96610.8561.27140.9143
SGAI 1.30060.75071.02481.48661.03431.34050.77430.93890.6941.3125
LVGI 0.89020.93310.70142.15151.19571.04581.07331.02290.93741.0457
TATA -0.0374-0.0465-0.0546-0.0766-0.0273-0.0588-0.0533-0.1332-0.0973-0.1814
M-score -2.23-2.69-2.62-3.59-2.17-2.63-2.43-3.46-3.19-3.55

Noble Corp PLC Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.62220.66480.55710.83070.84540.87290.64850.7230.93150.8684
GMI 0.97210.97810.96920.90310.84280.86150.83590.93711.0221.0205
AQI 1.11541.25750.9470.76140.59420.4890.61490.55371.47570.9536
SGI 0.96381.021.091.04651.0370.97481.00920.83340.68670.6497
DEPI 0.8560.96961.10661.34781.27141.14871.02371.01110.91430.9254
SGAI 0.93890.87250.77880.7970.6940.70730.68140.91811.31251.3936
LVGI 1.02291.0281.01271.00890.93740.89070.88080.91981.04571.0699
TATA -0.1332-0.13-0.1257-0.1216-0.0973-0.0906-0.0993-0.1004-0.1814-0.2228
M-score -3.46-3.28-3.39-3.24-3.19-3.22-3.41-3.53-3.55-4.06
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