Market Cap : 180 M | Enterprise Value : 180.81 M | P/E (TTM) : | P/B : 1.40 |
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The zones of discrimination for M-Score is as such:
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Good Sign:
Beneish M-Score -5.85 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
During the past 13 years, the highest Beneish M-Score of SandRidge Energy was 6.46. The lowest was -23.67. And the median was -3.17.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
* The bar in red indicates where SandRidge Energy's Beneish M-Score falls into.
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 SandRidge Energy 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 * 1.0388 | + | 0.528 * -1.3753 | + | 0.404 * 1.3755 | + | 0.892 * 0.4947 | + | 0.115 * 0.6136 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 1.4086 | + | 4.679 * -0.3255 | - | 0.327 * 1.6549 | |||||||
= | -5.85 |
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
This Year (Sep20) TTM: | Last Year (Sep19) TTM: |
Accounts Receivable was $16.3 Mil. Revenue was 27.676 + 16.655 + 40.329 + 59.852 = $144.5 Mil. Gross Profit was 8.051 + -8.984 + -6.001 + 1.651 = $-5.3 Mil. Total Current Assets was $30.1 Mil. Total Assets was $266.1 Mil. Property, Plant and Equipment(Net PPE) was $235.4 Mil. Depreciation, Depletion and Amortization(DDA) was $86.7 Mil. Selling, General, & Admin. Expense(SGA) was $26.8 Mil. Total Current Liabilities was $80.5 Mil. Long-Term Debt & Capital Lease Obligation was $0.0 Mil. Net Income was -48.749 + -215.779 + -12.67 + -249.142 = $-526.3 Mil. Non Operating Income was -50.67 + -199.929 + 2.332 + -244.596 = $-492.9 Mil. Cash Flow from Operations was 13.894 + -4.641 + 18.103 + 25.795 = $53.2 Mil. |
Accounts Receivable was $31.7 Mil. Revenue was 58.369 + 75.388 + 73.236 + 85.145 = $292.1 Mil. Gross Profit was -11.695 + 2.03 + 5.969 + 18.384 = $14.7 Mil. Total Current Assets was $41.4 Mil. Total Assets was $860.0 Mil. Property, Plant and Equipment(Net PPE) was $817.2 Mil. Depreciation, Depletion and Amortization(DDA) was $161.7 Mil. Selling, General, & Admin. Expense(SGA) was $38.5 Mil. Total Current Liabilities was $95.2 Mil. Long-Term Debt & Capital Lease Obligation was $62.0 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) |
= | (16.292 / 144.512) | / | (31.706 / 292.138) | |
= | 0.11273804 | / | 0.1085309 | |
= | 1.0388 |
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) | |
= | (14.688 / 292.138) | / | (-5.283 / 144.512) | |
= | 0.05027761 | / | -0.03655752 | |
= | -1.3753 |
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 - (30.118 + 235.439) / 266.121) | / | (1 - (41.396 + 817.231) / 859.952) | |
= | 0.00211934 | / | 0.00154078 | |
= | 1.3755 |
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 | |
= | 144.512 | / | 292.138 | |
= | 0.4947 |
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)) |
= | (161.651 / (161.651 + 817.231)) | / | (86.692 / (86.692 + 235.439)) | |
= | 0.16513839 | / | 0.26912033 | |
= | 0.6136 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
= | (26.845 / 144.512) | / | (38.526 / 292.138) | |
= | 0.18576312 | / | 0.13187603 | |
= | 1.4086 |
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 in leverage
LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
= | ((0 + 80.506) / 266.121) | / | ((62 + 95.195) / 859.952) | |
= | 0.30251652 | / | 0.18279509 | |
= | 1.6549 |
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 | |
= | (-526.34 - -492.863 | - | 53.151) | / | 266.121 | |
= | -0.3255 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
SandRidge Energy has a M-score of -5.85 suggests that the company is unlikely to be a manipulator.
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