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GuruFocus has detected 3 Warning Signs with Ultra Petroleum Corp $UPL.
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Ultra Petroleum Corp (NAS:UPL)
Beneish M-Score
9.44 (As of Today)

Warning Sign:

Beneish M-Score 9.44 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.

Ultra Petroleum Corp has a M-score of 9.45 signals that the company is a manipulator.

UPL' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 10000000
Current: 9.44

-10000000
10000000

During the past 13 years, the highest Beneish M-Score of Ultra Petroleum Corp was 10000000.00. The lowest was -10000000.00. And the median was -3.12.


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 Ultra Petroleum Corp 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 * 1.1329+0.528 * 0.7903+0.404 * 30.5106+0.892 * 1.0045+0.115 * 2.5909
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7511+4.679 * -0.1175-0.327 * 0.048
=9.45

* 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 $75.1 Mil.
Revenue was 220.958 + 215.861 + 199.253 + 146.591 = $782.7 Mil.
Gross Profit was 149.535 + 150.38 + 132.252 + 84.46 = $516.6 Mil.
Total Current Assets was $584.8 Mil.
Total Assets was $1,699.0 Mil.
Property, Plant and Equipment(Net PPE) was $1,080.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $126.0 Mil.
Selling, General & Admin. Expense(SGA) was $6.0 Mil.
Total Current Liabilities was $253.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -89.698 + -34.426 + 98.407 + 14.002 = $-11.7 Mil.
Non Operating Income was -120.98 + -151.325 + -1.013 + -21.341 = $-294.7 Mil.
Cash Flow from Operations was 171.359 + 136.816 + 139.06 + 35.428 = $482.7 Mil.
Accounts Receivable was $66.0 Mil.
Revenue was 159.386 + 189.302 + 222.503 + 207.998 = $779.2 Mil.
Gross Profit was 67.585 + 100.045 + 124.537 + 114.303 = $406.5 Mil.
Total Current Assets was $372.6 Mil.
Total Assets was $1,282.9 Mil.
Property, Plant and Equipment(Net PPE) was $909.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $337.5 Mil.
Selling, General & Admin. Expense(SGA) was $8.0 Mil.
Total Current Liabilities was $3,993.1 Mil.
Long-Term Debt was $0.0 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)
=(75.107 / 782.663) / (66.002 / 779.189)
=0.0959634 / 0.08470602
=1.1329

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)
=(406.47 / 779.189) / (516.627 / 782.663)
=0.52165777 / 0.6600887
=0.7903

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 - (584.774 + 1080.475) / 1699.029) / (1 - (372.611 + 909.475) / 1282.922)
=0.01988194 / 0.00065164
=30.5106

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
=782.663 / 779.189
=1.0045

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))
=(337.458 / (337.458 + 909.475)) / (126.026 / (126.026 + 1080.475))
=0.27063042 / 0.10445578
=2.5909

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)
=(6.01 / 782.663) / (7.966 / 779.189)
=0.00767891 / 0.01022345
=0.7511

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)
=((0 + 253.583) / 1699.029) / ((0 + 3993.052) / 1282.922)
=0.14925172 / 3.1124667
=0.048

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
=(-11.715 - -294.659 - 482.663) / 1699.029
=-0.1175

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.

Ultra Petroleum Corp has a M-score of 9.45 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.

Ultra Petroleum Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.52680.49381.41550.87561.05540.85990.81921.12290.76271.3666
GMI 0.99261.10181.09140.9270.97661.02381.07930.96461.2730.9234
AQI 0.33560.646913.01260.14681.05952.00711.12632.08350.06461.0154
SGI 1.01341.88880.6231.46891.1250.73511.15241.31780.68220.8594
DEPI 0.92661.08640.74581.39790.96290.42062.0391.20620.22012.9067
SGAI 0.87630.68051.86190.83850.95032.41210.42060.64680.56781.4458
LVGI 1.08391.24531.44581.010.98582.22950.85440.8534.3530.0234
TATA -0.1517-0.185-0.5764-0.188-0.1837-1.4388-0.0712-0.0647-3.9594-0.0475
M-score -2.98-3.12-0.55-3.37-3.16-9.87-2.48-1.83-22.85-2.06

Ultra Petroleum Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.12290.71560.80560.91610.76270.91361.06131.27931.36661.1329
GMI 0.96461.0391.10611.18011.2731.29521.21611.08830.92340.7903
AQI 2.08352.40811.85460.87420.06460.0450.12480.1871.015430.5107
SGI 1.31781.0860.96840.85270.68220.69380.69350.71690.85941.0045
DEPI 1.20621.09031.0130.77570.22010.28140.35290.46162.90672.5909
SGAI 0.64680.66210.90190.82720.56780.70160.60050.36861.44580.7511
LVGI 0.8530.88060.91860.94884.3533.56440.09270.11520.02340.048
TATA -0.0647-0.0878-0.1112-0.1363-3.9594-2.8454-2.712-2.368-0.0475-0.1175
M-score -1.83-2.38-2.76-3.26-22.85-17.25-15.33-13.50-2.069.45
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