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National Oilwell Varco Inc  (NYSE:NOV) Beneish M-Score: -3.14 (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.

National Oilwell Varco Inc has a M-score of -3.14 suggests that the company is not a manipulator.

NYSE:NOV' s Beneish M-Score Range Over the Past 10 Years
Min: -11.72   Max: 4.63
Current: -3.14

-11.72
4.63

During the past 13 years, the highest Beneish M-Score of National Oilwell Varco Inc was 4.63. The lowest was -11.72. And the median was -2.31.


Historical Data

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

* Premium members only.

National Oilwell Varco Inc Annual Data

Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.42 -2.65 -3.01 -11.72 -3.28

National Oilwell Varco Inc Quarterly Data

Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -8.20 4.63 -1.91 -3.28 -3.14

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


National Oilwell Varco Inc Distribution

* The bar in red indicates where National Oilwell Varco Inc's Beneish M-Score falls into.



Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 National Oilwell Varco 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 * 0.9825+0.528 * -0.1516+0.404 * 1.0287+0.892 * 1.0816+0.115 * 0.96
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8788+4.679 * -0.0351-0.327 * 0.9094
=-3.14

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

This Year (Mar18) TTM:Last Year (Mar17) TTM:
Accounts Receivable was $2,102 Mil.
Revenue was 1795 + 1969 + 1835 + 1759 = $7,358 Mil.
Gross Profit was 287 + 167 + 285 + 231 = $970 Mil.
Total Current Assets was $7,186 Mil.
Total Assets was $20,010 Mil.
Property, Plant and Equipment(Net PPE) was $2,926 Mil.
Depreciation, Depletion and Amortization(DDA) was $696 Mil.
Selling, General, & Admin. Expense(SGA) was $1,151 Mil.
Total Current Liabilities was $2,132 Mil.
Long-Term Debt & Capital Lease Obligation was $2,707 Mil.
Net Income was -68 + -14 + -26 + -75 = $-183 Mil.
Non Operating Income was -45 + -15 + -8 + -4 = $-72 Mil.
Cash Flow from Operations was -129 + 321 + 232 + 168 = $592 Mil.
Accounts Receivable was $1,978 Mil.
Revenue was 1741 + 1692 + 1646 + 1724 = $6,803 Mil.
Gross Profit was 209 + -459 + 79 + 35 = $-136 Mil.
Total Current Assets was $7,744 Mil.
Total Assets was $20,904 Mil.
Property, Plant and Equipment(Net PPE) was $3,108 Mil.
(DDA) was $703 Mil.
Selling, General, & Admin. Expense(SGA) was $1,211 Mil.
Total Current Liabilities was $2,852 Mil.
Long-Term Debt & Capital Lease Obligation was $2,707 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(2102 / 7358) / (1978 / 6803)
=0.28567546 / 0.29075408
=0.9825

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)
=(-136 / 6803) / (970 / 7358)
=-0.01999118 / 0.1318293
=-0.1516

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (7186 + 2926) / 20010) / (1 - (7744 + 3108) / 20904)
=0.49465267 / 0.48086491
=1.0287

4. SGI = Sales Growth Index

Ratio of Revenue 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
=7358 / 6803
=1.0816

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(703 / (703 + 3108)) / (696 / (696 + 2926))
=0.18446602 / 0.19215903
=0.96

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(1151 / 7358) / (1211 / 6803)
=0.15642838 / 0.1780097
=0.8788

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)
=((2707 + 2132) / 20010) / ((2707 + 2852) / 20904)
=0.24182909 / 0.26592997
=0.9094

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
=(-183 - -72 - 592) / 20010
=-0.0351

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.

National Oilwell Varco Inc has a M-score of -3.14 suggests that the company will not be a manipulator.


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