Flotek Beneish M Score

FTK
 Stock
  

USD 1.06  0.01  0.93%   

This module uses fundamental data of Flotek Industries to approximate the value of its Beneish M Score. Flotek Industries M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Flotek Industries Piotroski F Score and Flotek Industries Altman Z Score analysis.
  
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Flotek Industries Long Term Debt to Equity is decreasing as compared to previous years. The last year's value of Long Term Debt to Equity was reported at 0.17. The current Debt to Equity Ratio is estimated to increase to 1.60, while Issuance Repayment of Debt Securities is projected to decrease to (66.9 K). Flotek Industries Accounts Payable Turnover is decreasing as compared to previous years. The last year's value of Accounts Payable Turnover was reported at 6.46. The current Accrued Expenses Turnover is estimated to increase to 3.24, while Inventory Turnover is projected to decrease to 3.57.
At this time, it appears that Flotek Industries is an unlikely manipulator. The earnings manipulation may begin if Flotek Industries' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Flotek Industries executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Flotek Industries' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.2
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset QualityN/AFocus
Expense Coverage1.46Focus
Gross Margin Strengs1.47Focus
Accruals Factor1.46Focus
Depreciation Resistance1.0Focus
Net Sales Growth1.03Focus
Financial Leverage Condition1.0Focus

Flotek Industries Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Flotek Industries' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues44.4 M43.3 M
Fairly Up
Decreasing
Slightly volatile
Selling General and Administrative Expense30.3 M20.2 M
Way Up
Decreasing
Slightly volatile
Net Cash Flow from Operations(26.5 M)(25.8 M)
Fairly Down
Decreasing
Slightly volatile
Depreciation Amortization and Accretion1.3 M1.3 M
Fairly Up
Decreasing
Slightly volatile
Total Assets51.6 M50.2 M
Fairly Up
Decreasing
Slightly volatile
Property Plant and Equipment Net7.5 M7.3 M
Fairly Up
Decreasing
Slightly volatile
Trade and Non Trade Receivables13.6 M13.3 M
Fairly Up
Decreasing
Slightly volatile
Total Liabilities30.8 M30.1 M
Fairly Up
Decreasing
Slightly volatile
Current Assets43.7 M42.6 M
Fairly Up
Decreasing
Slightly volatile
Assets Non Current7.8 M7.6 M
Fairly Up
Decreasing
Slightly volatile
Current Liabilities19.3 M18.8 M
Fairly Up
Decreasing
Stable
Liabilities Non Current11.6 M11.3 M
Fairly Up
Decreasing
Slightly volatile
Total Debt13.6 M13.3 M
Fairly Up
Decreasing
Slightly volatile
Debt Current2.1 M2.1 M
Fairly Up
Decreasing
Very volatile
Debt Non Current17.5 M11.2 M
Way Up
Decreasing
Slightly volatile
Operating Income(32.4 M)(31.6 M)
Fairly Down
Decreasing
Slightly volatile
Gross Margin0.110.075
Way Up
Decreasing
Slightly volatile

Flotek Industries Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Flotek Industries' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Flotek Industries in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Flotek Industries' degree of accounting gimmicks and manipulations.

About Flotek Industries Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

48.44 Million

Share
Flotek Industries Operating Expenses is decreasing as compared to previous years. The last year's value of Operating Expenses was reported at 34.81 Million

Flotek Industries Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Flotek Industries. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues243.11 M177.77 M119.35 M53.14 M43.27 M44.41 M
Total Assets329.89 M285.88 M230.6 M86.21 M50.24 M51.57 M
Current Assets137.92 M194.78 M153.91 M66.45 M42.6 M43.72 M
Assets Non Current191.96 M91.1 M76.69 M19.75 M7.64 M7.85 M
Total Liabilities64.63 M84.26 M58.57 M39.04 M30.05 M30.84 M
Current Liabilities64.63 M84.26 M41.32 M28.86 M18.78 M19.27 M
Total Debt27.95 M49.73 M17.67 M14.8 M13.26 M13.61 M
Debt Current27.95 M49.73 M541 K4.74 M2.08 M2.13 M
Debt Non Current18.25 M7.83 M17.13 M10.06 M11.18 M17.52 M
Operating Income(10.32 M)(69.81 M)(75.5 M)(143.74 M)(31.55 M)(32.38 M)
Gross Margin0.220.1(0.24)(0.54)0.0750.11

About Flotek Industries Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Flotek Industries's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Flotek Industries using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Flotek Industries based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Flotek Industries, Inc. operates as a technology-driven chemistry and data company that serves customers across industrial, commercial, and consumer markets in the United States, the United Arab Emirates, and internationally. The company was incorporated in 1985 and is headquartered in Houston, Texas. Flotek Industries operates under Oil Gas Equipment Services classification in the United States and is traded on New York Stock Exchange. It employs 131 people.

Flotek Industries Investors Sentiment

The influence of Flotek Industries' investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Flotek. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Flotek Industries Implied Volatility

    
  8.62  
Flotek Industries' implied volatility exposes the market's sentiment of Flotek Industries stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Flotek Industries' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Flotek Industries stock will not fluctuate a lot when Flotek Industries' options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Flotek Industries in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Flotek Industries' short interest history, or implied volatility extrapolated from Flotek Industries options trading.

Current Sentiment - FTK

Flotek Industries Investor Sentiment

Greater number of Macroaxis users are currently bullish on Flotek Industries. What is your opinion about investing in Flotek Industries? Are you bullish or bearish?
Bullish
Bearish
98% Bullish
2% Bearish

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Please check Flotek Industries Piotroski F Score and Flotek Industries Altman Z Score analysis. Note that the Flotek Industries information on this page should be used as a complementary analysis to other Flotek Industries' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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When running Flotek Industries price analysis, check to measure Flotek Industries' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Flotek Industries is operating at the current time. Most of Flotek Industries' value examination focuses on studying past and present price action to predict the probability of Flotek Industries' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Flotek Industries' price. Additionally, you may evaluate how the addition of Flotek Industries to your portfolios can decrease your overall portfolio volatility.
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Is Flotek Industries' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Flotek Industries. If investors know Flotek will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Flotek Industries listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Market Capitalization
82 M
Quarterly Revenue Growth YOY
0.094
Return On Assets
-0.18
Return On Equity
-1.25
The market value of Flotek Industries is measured differently than its book value, which is the value of Flotek that is recorded on the company's balance sheet. Investors also form their own opinion of Flotek Industries' value that differs from its market value or its book value, called intrinsic value, which is Flotek Industries' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Flotek Industries' market value can be influenced by many factors that don't directly affect Flotek Industries' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Flotek Industries' value and its price as these two are different measures arrived at by different means. Investors typically determine Flotek Industries value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Flotek Industries' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.