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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.
During the past 13 years, the highest Beneish M-Score of VAALCO Energy Inc was 675.83. The lowest was -12.59. And the median was -2.64.
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 * 0.3306||+||0.528 * -0.1956||+||0.404 * 1.0617||+||0.892 * 0.7211||+||0.115 * 0.6084|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.6909||+||4.679 * -1.3685||-||0.327 * 1.9926|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $5.94 Mil.|
Revenue was 14.635 + 18.847 + 10.976 + 17.523 = $61.98 Mil.
Gross Profit was 7.473 + 11.506 + -0.278 + -42.389 = $-23.69 Mil.
Total Current Assets was $41.55 Mil.
Total Assets was $78.20 Mil.
Property, Plant and Equipment(Net PPE) was $25.58 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.31 Mil.
Selling, General & Admin. Expense(SGA) was $16.92 Mil.
Total Current Liabilities was $50.01 Mil.
Long-Term Debt was $8.13 Mil.
Net Income was -15.599 + -0.261 + -8.063 + -80.779 = $-104.70 Mil.
Non Operating Income was -0.149 + -0.363 + 0.524 + 0.988 = $1.00 Mil.
Cash Flow from Operations was -1.665 + 1.809 + -0.18 + 1.356 = $1.32 Mil.
|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 + -19.131 + -2.401 = $6.43 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 $28.13 Mil.
Selling, General & Admin. Expense(SGA) was $13.88 Mil.
Total Current Liabilities was $57.79 Mil.
Long-Term Debt was $15.00 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(5.94 / 61.981)||/||(24.914 / 85.954)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(6.425 / 85.954)||/||(-23.688 / 61.981)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (41.55 + 25.578) / 78.202)||/||(1 - (73.73 + 95.329) / 195.079)|
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.
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))|
|=||(28.126 / (28.126 + 95.329))||/||(15.313 / (15.313 + 25.578))|
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)|
|=||(16.919 / 61.981)||/||(13.876 / 85.954)|
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)|
|=||((8.134 + 50.01) / 78.202)||/||((15 + 57.79) / 195.079)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-104.702 - 1||-||1.32)||/||78.202|
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 -10.84 suggests that the company will not be a manipulator.
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
VAALCO Energy Inc Annual Data
VAALCO Energy Inc Quarterly Data