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VAALCO Energy Inc (NYSE:EGY)
Beneish M-Score
-1.09 (As of Today)

Warning Sign:

Beneish M-Score -1.09 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.

VAALCO Energy Inc has a M-score of -1.09 signals that the company is a manipulator.

EGY' s Beneish M-Score Range Over the Past 10 Years
Min: -7.31   Max: 675.56
Current: -1.09

-7.31
675.56

During the past 13 years, the highest Beneish M-Score of VAALCO Energy Inc was 675.56. The lowest was -7.31. And the median was -2.52.


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 VAALCO Energy Inc 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 * 3.2799+0.528 * 1.4211+0.404 * 11.9947+0.892 * 0.5275+0.115 * 0.4443
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.0401+4.679 * -0.9426-0.327 * 1.9044
=-1.09

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $24.91 Mil.
Revenue was 17.546 + 27.137 + 18.239 + 23.032 = $85.95 Mil.
Gross Profit was 9.687 + 18.27 + 8.328 + 12.957 = $49.24 Mil.
Total Current Assets was $73.73 Mil.
Total Assets was $195.08 Mil.
Property, Plant and Equipment(Net PPE) was $95.33 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.14 Mil.
Selling, General & Admin. Expense(SGA) was $15.01 Mil.
Total Current Liabilities was $57.79 Mil.
Long-Term Debt was $15.00 Mil.
Net Income was -33.668 + -5.204 + -39.005 + -98.338 = $-176.22 Mil.
Non Operating Income was 1.622 + 0.438 + -0.056 + -0.483 = $1.52 Mil.
Cash Flow from Operations was 10.566 + 27.554 + -0.601 + -31.364 = $6.16 Mil.
Accounts Receivable was $14.40 Mil.
Revenue was 24.486 + 52.098 + 28.071 + 58.282 = $162.94 Mil.
Gross Profit was 17.341 + 47.25 + 18.421 + 49.642 = $132.65 Mil.
Total Current Assets was $169.21 Mil.
Total Assets was $362.86 Mil.
Property, Plant and Equipment(Net PPE) was $189.61 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.36 Mil.
Selling, General & Admin. Expense(SGA) was $13.95 Mil.
Total Current Liabilities was $56.10 Mil.
Long-Term Debt was $15.00 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)
=(24.914 / 85.954) / (14.399 / 162.937)
=0.28985271 / 0.08837158
=3.2799

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)
=(18.27 / 162.937) / (9.687 / 85.954)
=0.81414289 / 0.57288782
=1.4211

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 - (73.73 + 95.329) / 195.079) / (1 - (169.211 + 189.61) / 362.856)
=0.13338186 / 0.01112011
=11.9947

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
=85.954 / 162.937
=0.5275

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))
=(21.362 / (21.362 + 189.61)) / (28.135 / (28.135 + 95.329))
=0.10125514 / 0.22788019
=0.4443

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)
=(15.011 / 85.954) / (13.948 / 162.937)
=0.17463992 / 0.08560364
=2.0401

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)
=((15 + 57.79) / 195.079) / ((15 + 56.095) / 362.856)
=0.37313089 / 0.19593172
=1.9044

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
=(-176.215 - 1.521 - 6.155) / 195.079
=-0.9426

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.

VAALCO Energy Inc has a M-score of -1.09 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 own currency.

VAALCO Energy Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.691.30431.41110.41612.4011.19330.14731.23011.35811.6871
GMI 0.9710.9941.12140.84921.10090.96870.95711.01141.10141.0427
AQI 0.87042.56610.86141.01160.91140.14884.77461.02460.15515.7283
SGI 1.50321.15761.27171.35570.68011.16631.56490.9280.86680.7543
DEPI 1.21491.37630.4191.19920.8681.25770.83981.29641.44520.6951
SGAI 1.42340.76452.63610.99371.30710.66260.89921.21851.10221.672
LVGI 0.48191.7730.82691.73370.61430.67410.81451.84340.88431.4467
TATA -0.0698-0.1432-0.1302-0.3049-0.1523-0.0317-0.2063-0.3498-0.1045-0.4027
M-score -2.59-2.27-2.75-4.42-2.11-2.47-2.16-4.23-2.971.72

VAALCO Energy Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 2.8730.78751.35810.08694.17862.75141.6871739.53320.71753.2799
GMI 1.06141.10751.10141.1261.0250.95441.04271.03311.30171.4211
AQI 1.06371.07290.1550.29240.27270.249815.72837.12517.798711.9946
SGI 0.7860.78540.86680.78921.07150.99020.75430.76920.52720.5275
DEPI 1.85311.8491.44521.27150.91650.94320.69510.62650.62130.4443
SGAI 1.26081.19271.10211.18930.97541.31551.67191.7962.42382.0401
LVGI 1.70261.71030.88430.91731.25891.32541.44672.5122.20251.9044
TATA -0.2227-0.3212-0.1046-0.1066-0.2352-0.1268-0.4027-0.6456-0.6372-0.9426
M-score -2.11-4.45-2.98-4.20-0.96-1.971.72675.56-3.92-1.09
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