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GuruFocus has detected 5 Warning Signs with Nexstar Media Group Inc $NXST.
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Nexstar Media Group Inc (NAS:NXST)
Beneish M-Score
-1.18 (As of Today)

Warning Sign:

Beneish M-Score -1.18 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.

Nexstar Media Group Inc has a M-score of -1.18 signals that the company is a manipulator.

NXST' s Beneish M-Score Range Over the Past 10 Years
Min: -3.63   Max: -1.18
Current: -1.18

-3.63
-1.18

During the past 13 years, the highest Beneish M-Score of Nexstar Media Group Inc was -1.18. The lowest was -3.63. 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 Nexstar Media Group 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 * 1.828+0.528 * 1.0421+0.404 * 1.0462+0.892 * 1.4604+0.115 * 1.5373
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0403+4.679 * -0.0089-0.327 * 0.7741
=-1.18

* 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 $534 Mil.
Revenue was 540.317 + 309.879 + 275.659 + 261.994 = $1,388 Mil.
Gross Profit was 321.588 + 211.684 + 174.915 + 169.059 = $877 Mil.
Total Current Assets was $1,082 Mil.
Total Assets was $7,523 Mil.
Property, Plant and Equipment(Net PPE) was $741 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $370 Mil.
Total Current Liabilities was $551 Mil.
Long-Term Debt was $4,481 Mil.
Net Income was 6.049 + 20.482 + 24.799 + 24.529 = $76 Mil.
Non Operating Income was -31.911 + -0.146 + -0.126 + -0.147 = $-32 Mil.
Cash Flow from Operations was -21.005 + 84.763 + 66.785 + 44.554 = $175 Mil.
Accounts Receivable was $200 Mil.
Revenue was 255.658 + 252.262 + 223.031 + 219.349 = $950 Mil.
Gross Profit was 165.535 + 169.623 + 144.48 + 146.311 = $626 Mil.
Total Current Assets was $234 Mil.
Total Assets was $1,892 Mil.
Property, Plant and Equipment(Net PPE) was $288 Mil.
Depreciation, Depletion and Amortization(DDA) was $102 Mil.
Selling, General & Admin. Expense(SGA) was $243 Mil.
Total Current Liabilities was $145 Mil.
Long-Term Debt was $1,490 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)
=(533.931 / 1387.849) / (199.999 / 950.3)
=0.38471837 / 0.2104588
=1.828

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)
=(625.949 / 950.3) / (877.246 / 1387.849)
=0.65868568 / 0.63209038
=1.0421

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 - (1082.18 + 741.484) / 7523.1) / (1 - (234.327 + 287.655) / 1892.185)
=0.75759142 / 0.72413797
=1.0462

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
=1387.849 / 950.3
=1.4604

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))
=(102.039 / (102.039 + 287.655)) / (152.218 / (152.218 + 741.484))
=0.26184391 / 0.17032299
=1.5373

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)
=(369.743 / 1387.849) / (243.356 / 950.3)
=0.26641443 / 0.25608334
=1.0403

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)
=((4481.096 + 551.22) / 7523.1) / ((1489.899 + 145.111) / 1892.185)
=0.66891521 / 0.8640857
=0.7741

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
=(75.859 - -32.33 - 175.097) / 7523.1
=-0.0089

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.

Nexstar Media Group Inc has a M-score of -1.18 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.

Nexstar Media Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.13330.89991.33630.81231.14760.84671.10640.92981.06290.9181
GMI 1.01150.99581.04580.92461.02250.96821.07321.0041.06081.0139
AQI 0.96940.90220.95320.96321.00841.06211.01240.98761.11981.1001
SGI 1.00621.06790.88441.24360.97811.23541.32671.25681.41991.2307
DEPI 0.95191.2851.03371.1721.00241.04960.88591.29720.7721.0095
SGAI 1.01111.05361.0390.90431.06570.90480.9760.91710.93330.9213
LVGI 1.01951.12561.01740.99681.00230.81881.02160.9330.94720.9682
TATA -0.0801-0.226-0.0874-0.0875-0.08790.11190.0061-0.0717-0.0649-0.0525
M-score -2.75-3.63-2.69-2.86-2.77-1.80-2.03-2.58-2.27-2.52

Nexstar Media Group Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.92981.18071.1361.10421.06290.89410.93470.98230.91811.828
GMI 1.0041.01271.01641.03011.06081.05441.05181.041.01391.0421
AQI 0.98761.09791.08031.10071.11981.02571.00511.15181.10011.0462
SGI 1.25681.33451.41671.45141.41991.35911.28681.24931.23071.4604
DEPI 1.29721.37171.21531.12350.7720.74430.80950.87311.00951.5373
SGAI 0.91710.91050.880.88010.93330.93420.96010.95720.92131.0403
LVGI 0.9330.88750.88570.90750.94720.98870.99040.99050.96820.7741
TATA -0.0717-0.0529-0.0502-0.0563-0.0649-0.0593-0.0641-0.0414-0.0525-0.0089
M-score -2.58-2.12-2.09-2.12-2.27-2.51-2.57-2.39-2.52-1.18
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