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

Warning Sign:

Beneish M-Score 1.71 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 1.71 signals that the company is a manipulator.

EGY' s 10-Year Beneish M-Score Range
Min: -7.15   Max: 83.22
Current: 2.7

-7.15
83.22

During the past 13 years, the highest Beneish M-Score of VAALCO Energy Inc was 83.22. The lowest was -7.15. And the median was -2.43.


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 * 1.6871+0.528 * 1.0175+0.404 * 15.7283+0.892 * 0.7543+0.115 * 0.6951
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6719+4.679 * -0.4027-0.327 * 1.4467
=1.71

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $11.9 Mil.
Revenue was 23.032 + 24.486 + 52.098 + 28.071 = $127.7 Mil.
Gross Profit was 12.812 + 16.743 + 43.957 + 7.098 = $80.6 Mil.
Total Current Assets was $113.1 Mil.
Total Assets was $248.8 Mil.
Property, Plant and Equipment(Net PPE) was $108.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.1 Mil.
Selling, General & Admin. Expense(SGA) was $14.2 Mil.
Total Current Liabilities was $38.5 Mil.
Long-Term Debt was $15.0 Mil.
Net Income was -98.338 + 3.109 + 24.712 + -7.038 = $-77.6 Mil.
Non Operating Income was -0.483 + 0.164 + -0.125 + -0.291 = $-0.7 Mil.
Cash Flow from Operations was -31.364 + 14.194 + 64.102 + -23.542 = $23.4 Mil.
Accounts Receivable was $9.4 Mil.
Revenue was 58.282 + 37.74 + 29.118 + 44.137 = $169.3 Mil.
Gross Profit was 47.17 + 14.094 + 17.823 + 29.647 = $108.7 Mil.
Total Current Assets was $167.5 Mil.
Total Assets was $308.2 Mil.
Property, Plant and Equipment(Net PPE) was $138.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $11.3 Mil.
Total Current Liabilities was $45.8 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)
=(11.927 / 127.687) / (9.372 / 169.277)
=0.0934081 / 0.05536488
=1.6871

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)
=(16.743 / 169.277) / (12.812 / 127.687)
=0.64234361 / 0.63130937
=1.0175

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 - (113.05 + 108.124) / 248.849) / (1 - (167.464 + 138.524) / 308.167)
=0.11121202 / 0.00707084
=15.7283

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
=127.687 / 169.277
=0.7543

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))
=(16.929 / (16.929 + 138.524)) / (20.086 / (20.086 + 108.124))
=0.10890108 / 0.15666485
=0.6951

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)
=(14.194 / 127.687) / (11.255 / 169.277)
=0.11116245 / 0.06648865
=1.6719

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 + 38.54) / 248.849) / ((0 + 45.829) / 308.167)
=0.21515055 / 0.14871482
=1.4467

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
=(-77.555 - -0.735 - 23.39) / 248.849
=-0.4027

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 1.71 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 0.9710.9941.12140.84921.10091.03120.92791.29531.01661.0174
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 -2.59-2.27-2.75-4.42-2.11-2.44-2.18-4.08-3.021.71

VAALCO Energy Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.8291.23010.12.8730.78751.358140.93485.53072.75141.6871
GMI 0.99521.29531.38651.56421.93141.01661.08290.83270.60631.0175
AQI 0.89321.02461.08191.06371.07290.1550.29240.27270.249815.7283
SGI 1.15840.9280.92910.7860.78540.86680.78921.07150.99020.7543
DEPI 1.10881.29641.33371.85311.8491.44521.27150.91650.94320.6951
SGAI 1.02771.21881.17661.26081.19271.10211.18930.97541.31551.6719
LVGI 1.01691.84341.29961.70261.71030.88430.91731.25891.32541.4467
TATA -0.1779-0.3498-0.2614-0.2227-0.3212-0.1046-0.1066-0.2352-0.1268-0.4027
M-score -3.37-4.08-4.45-1.84-4.02-3.0233.360.18-2.151.71
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