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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.
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.
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|
|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
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)|
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)|
|=||(18.27 / 162.937)||/||(9.687 / 85.954)|
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 - (73.73 + 95.329) / 195.079)||/||(1 - (169.211 + 189.61) / 362.856)|
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))|
|=||(21.362 / (21.362 + 189.61))||/||(28.135 / (28.135 + 95.329))|
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)|
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)|
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|
|=||(-176.215 - 1.521||-||6.155)||/||195.079|
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.
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