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Equal Energy Ltd (NYSE:EQU)
Beneish M-Score
-2.97 (As of Today)

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.

Equal Energy Ltd has a M-score of -3.08 suggests that the company is not a manipulator.

EQU' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 178.17
Current: -2.97

-10000000
178.17

During the past 13 years, the highest Beneish M-Score of Equal Energy Ltd was 178.17. The lowest was -10000000.00. And the median was -2.35.


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 Equal Energy Ltd 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 * 0.7099+0.528 * 0.8407+0.404 * 0.8347+0.892 * 1.2278+0.115 * 1.2981
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9991+4.679 * -0.0967-0.327 * 0.8896
=-3.08

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $13.40 Mil.
Revenue was 20.084 + 15.382 + 16.592 + 18.329 = $70.39 Mil.
Gross Profit was 15.27 + 10.99 + 12.012 + 13.877 = $52.15 Mil.
Total Current Assets was $33.43 Mil.
Total Assets was $227.49 Mil.
Property, Plant and Equipment(Net PPE) was $164.03 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.38 Mil.
Selling, General & Admin. Expense(SGA) was $14.75 Mil.
Total Current Liabilities was $12.36 Mil.
Long-Term Debt was $40.71 Mil.
Net Income was 5.758 + 2.647 + -0.867 + 4.746 = $12.28 Mil.
Non Operating Income was 1.454 + 1.16 + -1.023 + 1.51 = $3.10 Mil.
Cash Flow from Operations was 8.243 + 6.995 + 8.006 + 7.933 = $31.18 Mil.
Accounts Receivable was $15.37 Mil.
Revenue was 11.534 + 15.092 + 11.858 + 18.846 = $57.33 Mil.
Gross Profit was 7.153 + 10.469 + 5.182 + 12.906 = $35.71 Mil.
Total Current Assets was $37.81 Mil.
Total Assets was $226.95 Mil.
Property, Plant and Equipment(Net PPE) was $153.24 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.77 Mil.
Selling, General & Admin. Expense(SGA) was $12.03 Mil.
Total Current Liabilities was $15.22 Mil.
Long-Term Debt was $44.29 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)
=(13.399 / 70.387) / (15.374 / 57.33)
=0.19036186 / 0.26816675
=0.7099

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)
=(10.99 / 57.33) / (15.27 / 70.387)
=0.62288505 / 0.74088965
=0.8407

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 - (33.426 + 164.033) / 227.491) / (1 - (37.812 + 153.243) / 226.947)
=0.13201401 / 0.15815146
=0.8347

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
=70.387 / 57.33
=1.2278

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))
=(21.769 / (21.769 + 153.243)) / (17.383 / (17.383 + 164.033))
=0.12438576 / 0.09581845
=1.2981

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)
=(14.75 / 70.387) / (12.025 / 57.33)
=0.20955574 / 0.20975057
=0.9991

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)
=((40.707 + 12.36) / 227.491) / ((44.294 + 15.219) / 226.947)
=0.23327077 / 0.26223303
=0.8896

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
=(12.284 - 3.101 - 31.177) / 227.491
=-0.0967

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.

Equal Energy Ltd has a M-score of -3.08 suggests that the company will not 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.

Equal Energy Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.18891.54880.71420.92040.87431.45460.93431.44530.67211.165
GMI 1.47860.98430.94821.27490.81151.25880.86930.71021.18920.8759
AQI 221.65930.50130.86720.06564.92910.3612.285212.28530.47830.8758
SGI 1.62031.51111.54040.9971.08280.53511.1780.53760.83940.9609
DEPI 0.93411.3970.57491.13531.27340.94081.51141.53510.57741.384
SGAI 0.87331.59411.27561.4220.62082.06651.01960.90381.23731.3602
LVGI 0.65660.90511.5061.33860.7871.0811.04081.3470.41640.9747
TATA -0.1136-0.0732-0.0764-0.2365-0.1439-0.2006-0.1868-0.1285-0.0477-0.1091
M-score 87.24-2.10-2.96-4.06-1.54-3.75-2.761.29-3.16-3.00

Equal Energy Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.3491.46720.71880.9635111.16550.7099
GMI 0.72270.60011.16891.32151.62724.38410.8760.8407
AQI 12.28530.37940.47837.30716.99526.38980.87580.8347
SGI 0.57590.52040.78480.83291.501264.37970.96051.2278
DEPI 0.63051.51051.39280.63968.90589.80911.3841.2981
SGAI 0.88870.7771.25851.64241.16740.03751.36080.9991
LVGI 1.3470.83180.41640.62590.60940.61960.97470.8896
TATA -0.1269-0.0935-0.0365-0.0287-0.0271-0.0294-0.1096-0.0967
M-score 1.15-3.23-3.03-0.111.6069.74-3.00-3.08
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