Switch to:
GuruFocus has detected 5 Warning Signs with Schlumberger Ltd $SLB.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Schlumberger Ltd (NYSE:SLB)
Beneish M-Score
-2.19 (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.

Schlumberger Ltd has a M-score of -2.19 signals that the company is a manipulator.

SLB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86   Max: -1.67
Current: -2.19

-3.86
-1.67

During the past 13 years, the highest Beneish M-Score of Schlumberger Ltd was -1.67. The lowest was -3.86. And the median was -2.59.


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 Schlumberger Ltd 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 * 1.1608+0.528 * 1.5263+0.404 * 1.3458+0.892 * 0.8876+0.115 * 0.9365
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9101+4.679 * -0.0461-0.327 * 0.9137
=-2.19

* 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 $8,636 Mil.
Revenue was 6940 + 7154 + 7073 + 7218 = $28,385 Mil.
Gross Profit was 864 + 961 + 931 + 903 = $3,659 Mil.
Total Current Assets was $21,883 Mil.
Total Assets was $76,175 Mil.
Property, Plant and Equipment(Net PPE) was $12,507 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,116 Mil.
Selling, General & Admin. Expense(SGA) was $391 Mil.
Total Current Liabilities was $13,776 Mil.
Long-Term Debt was $16,538 Mil.
Net Income was 279 + -205 + 176 + -2160 = $-1,910 Mil.
Non Operating Income was -128 + -723 + -291 + -2962 = $-4,104 Mil.
Cash Flow from Operations was 656 + 2013 + 1406 + 1632 = $5,707 Mil.
Accounts Receivable was $8,382 Mil.
Revenue was 6565 + 7825 + 8532 + 9057 = $31,979 Mil.
Gross Profit was 1105 + 1532 + 1734 + 1921 = $6,292 Mil.
Total Current Assets was $27,700 Mil.
Total Assets was $69,141 Mil.
Property, Plant and Equipment(Net PPE) was $13,259 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,003 Mil.
Selling, General & Admin. Expense(SGA) was $484 Mil.
Total Current Liabilities was $12,880 Mil.
Long-Term Debt was $17,233 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)
=(8636 / 28385) / (8382 / 31979)
=0.3042452 / 0.26210951
=1.1608

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)
=(6292 / 31979) / (3659 / 28385)
=0.19675412 / 0.12890611
=1.5263

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 - (21883 + 12507) / 76175) / (1 - (27700 + 13259) / 69141)
=0.54853955 / 0.40760186
=1.3458

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
=28385 / 31979
=0.8876

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))
=(4003 / (4003 + 13259)) / (4116 / (4116 + 12507))
=0.23189665 / 0.24760873
=0.9365

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)
=(391 / 28385) / (484 / 31979)
=0.01377488 / 0.01513493
=0.9101

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)
=((16538 + 13776) / 76175) / ((17233 + 12880) / 69141)
=0.39795208 / 0.43553029
=0.9137

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
=(-1910 - -4104 - 5707) / 76175
=-0.0461

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.

Schlumberger Ltd has a M-score of -2.19 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.

Schlumberger Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.02511.00361.16761.08780.89781.04670.91350.92371.07561.3631
GMI 0.90171.11021.25311.04191.11131.00090.89851.02031.13441.4862
AQI 0.89280.93181.0321.37490.94090.93591.04581.04321.01551.2988
SGI 1.23281.16310.83321.24991.27831.14151.10871.05190.73070.7844
DEPI 1.11531.03380.92991.09660.92441.01690.96820.97320.90110.9632
SGAI 0.96990.83851.09950.46511.04890.85080.92641.08551.42331.0401
LVGI 0.8330.91070.93940.91181.0931.02761.00281.03741.13580.9627
TATA -0.034-0.0329-0.0569-0.0237-0.0136-0.0201-0.0497-0.0552-0.0577-0.0504
M-score -2.43-2.39-2.60-1.98-2.40-2.41-2.72-2.76-2.97-2.20

Schlumberger Ltd Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.92370.88140.82050.89941.07561.2011.45581.44471.36311.1608
GMI 1.021.05071.01241.05831.13521.17981.29891.40281.48581.5263
AQI 1.04321.04451.0561.08731.01550.99181.2021.1871.29881.3458
SGI 1.05191.01440.9520.84360.73070.66830.67290.70650.78440.8876
DEPI 0.97320.97220.91630.90810.90110.92530.93480.94110.96320.9365
SGAI 1.08781.12891.13451.23131.41741.48111.4281.28071.04220.9101
LVGI 1.03741.03991.0030.96551.13581.21381.14551.18860.96270.9137
TATA -0.0562-0.0586-0.0657-0.0744-0.0577-0.0619-0.0488-0.0423-0.0504-0.0461
M-score -2.77-2.84-3.00-3.03-2.97-2.95-2.47-2.36-2.20-2.19
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

FEEDBACK