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Beneish M-Score 1.02 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.
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 -2.25.
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 * 0.9316||+||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|
|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 $17.0 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
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)||/||(16.972 / 169.277)|
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)|
|=||(16.743 / 169.277)||/||(12.812 / 127.687)|
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 - (113.05 + 108.124) / 248.849)||/||(1 - (167.464 + 138.524) / 308.167)|
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))|
|=||(16.929 / (16.929 + 138.524))||/||(20.086 / (20.086 + 108.124))|
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)|
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)|
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|
|=||(-77.555 - -0.735||-||23.39)||/||248.849|
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 1.02 signals that the company is likely to 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