National Penn Bancshares Beneish M-Score 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 Penn Bancshares 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 * 0.9416 | + | 0.528 * 1 | + | 0.404 * 1.0234 | + | 0.892 * 1.0455 | + | 0.115 * 0.8623 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9786 | + | 4.679 * -0.001229 | - | 0.327 * 0.9446 |
| = | -2.48 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Dec15) TTM: | Last Year (Dec14) TTM: |
Total Receivables was $29.0 Mil.
Revenue was 89.143 + 92.893 + 91.522 + 91.612 = $365.2 Mil.
Gross Profit was 89.143 + 92.893 + 91.522 + 91.612 = $365.2 Mil.
Total Current Assets was $233.1 Mil.
Total Assets was $9,598.9 Mil.
Property, Plant and Equipment(Net PPE) was $106.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.0 Mil.
Selling, General, & Admin. Expense(SGA) was $123.4 Mil.
Total Current Liabilities was $102.7 Mil.
Long-Term Debt & Capital Lease Obligation was $1,036.1 Mil.
Net Income was 28.85 + 27.876 + 27.238 + 26.727 = $110.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 33.211 + 32.862 + 39.788 + 16.628 = $122.5 Mil.
|
Total Receivables was $29.5 Mil.
Revenue was 91.074 + 87.101 + 87.347 + 83.767 = $349.3 Mil.
Gross Profit was 91.074 + 87.101 + 87.347 + 83.767 = $349.3 Mil.
Total Current Assets was $443.3 Mil.
Total Assets was $9,750.9 Mil.
Property, Plant and Equipment(Net PPE) was $116.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.1 Mil.
Selling, General, & Admin. Expense(SGA) was $120.6 Mil.
Total Current Liabilities was $112.1 Mil.
Long-Term Debt & Capital Lease Obligation was $1,112.7 Mil.
|
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
| = | (29.03 / 365.17) | / | (29.491 / 349.289) |
| = | 0.079497 | / | 0.084432 |
| | = | 0.9416 |
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) |
| = | (349.289 / 349.289) | / | (365.17 / 365.17) |
| = | 1 | / | 1 |
| | = | 1 |
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 - (233.126 + 106.209) / 9598.902) | / | (1 - (443.33 + 116.414) / 9750.865) |
| = | 0.964649 | / | 0.942595 |
| | = | 1.0234 |
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 |
| = | 365.17 | / | 349.289 |
| | = | 1.0455 |
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)) |
| = | (12.096 / (12.096 + 116.414)) | / | (13.014 / (13.014 + 106.209)) |
| = | 0.094125 | / | 0.109157 |
| | = | 0.8623 |
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) |
| = | (123.362 / 365.17) | / | (120.58 / 349.289) |
| = | 0.337821 | / | 0.345216 |
| | = | 0.9786 |
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) |
| = | ((1036.149 + 102.72) / 9598.902) | / | ((1112.699 + 112.077) / 9750.865) |
| = | 0.118646 | / | 0.125607 |
| | = | 0.9446 |
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 |
| = | (110.691 - 0 | - | 122.489) | / | 9598.902 |
| | = | -0.001229 |
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.
National Penn Bancshares has a M-score of -2.48 suggests that the company is unlikely to be a manipulator.
National Penn Bancshares (National Penn Bancshares) Business Description
Traded in Other Exchanges
N/A
Address
National Penn Bancshares Inc is a Pennsylvania business corporation incorporated in January 1982. The Company is a registered bank holding company. The Company provides financial services, through its subsidiary National Penn Bank. The Company through its subsidiaries is engaged in activities related to the business of banking. National Penn's financial services affiliates consist of National Penn Wealth Management, N.A., including its National Penn Investors Trust Company division; National Penn Capital Advisors, Inc.; Institutional Advisors, LLC; National Penn Insurance Services Group, Inc., including its Higgins Insurance and Caruso Benefits divisions. Commercial banking is its main business focus. Commercial banking services are provided to small and medium sized businesses with annual gross revenues generally between $1 million and $100 million located in its market areas. offer a wide range of products including short-term loans for seasonal and working capital purposes, term loans secured by real estate and other assets, loans for construction and expansion needs, revolving credit facilities, and a full array of cash management services, including remote deposit capture, disbursement, collection, investment and electronic banking services. Consumer banking offers deposit accounts, which include demand, NOW, money market, other checking and savings accounts, and certificates of deposit. It also offers consumer loan products such as installment loans, home equity loans, residential mortgage loans, education loans and credit cards. In addition, it offers automated teller services, safe deposit and night depository facilities and internet banking services, including on-line bill paying and mobile banking. In addition to generation of fee income through its commercial and consumer banking operations, including mortgage lending the Company has a number of specialized investment and insurance businesses to develop fee income and to serve specific markets. The Company also provides loans directly to consumers within its markets to finance personal residences, automobiles, college tuition, home improvements and other personal needs. The Company also makes indirect loans to customers for the purchase of both new and used vehicles. The majority of residential mortgages is conformed to FNMA and FHLMC underwriting criteria and is sold to secondary market investors. Other residential products such as jumbo mortgages are originated and typically held in its loan portfolio. The Company also provides home equity loans, home equity lines of credit and other consumer loans through its network of retail branch offices and its Private Banking division. The Company is subject to various federal and state statutes applicable to banks chartered in the United States, as well as regulations of the Office of the Comptroller of the Currency.
Executives
| Natalye Paquin |
director |
14 NORTH MAIN STREET, PO BOX 197, SOUDERTON PA 18964 |
| Sandra Bodnyk |
officer: SEVP - Chief Risk Officer |
NATIONAL PENN BANCSHARES, INC, 645 HAMILTON STREET, ALLENTOWN PA 18101 |
| Michael E. Martin |
director |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus Llc |
10 percent owner |
450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus X Partners, L.p. |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus Private Equity X, L.p. |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus X Gp L.p. |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus X, L.p. |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Wpp Gp Llc |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVE, NEW YORK NY 10017 |
| Warburg Pincus Partners, L.p. |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus Partners Gp Llc |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Charles R Kaye |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Joseph P. Landy |
10 percent owner |
C/O WARBURG PINCUS LLC, 450 LEXINGTON AVENUE, NEW YORK NY 10017 |
| Warburg Pincus & Co. |
10 percent owner |
450 LEXINGTON AVENUE, NEW YORK, NY NY 100173147 |
| Tito L Lima |
officer: EVP - Corporate Controller |
212 TOWHEE DRIVE, BOALSBURG PA 16827 |
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