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Frontline Ltd (NYSE:FRO)
Beneish M-Score
-2.94 (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.

Frontline Ltd has a M-score of -2.94 suggests that the company is not a manipulator.

FRO' s Beneish M-Score Range Over the Past 10 Years
Min: -6.4   Max: 23.67
Current: -2.94

-6.4
23.67

During the past 13 years, the highest Beneish M-Score of Frontline Ltd was 23.67. The lowest was -6.40. And the median was -2.63.


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 Frontline 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+0.528 * 0.7843+0.404 * 1.492+0.892 * 1.1534+0.115 * 2.4908
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.2401+4.679 * -0.0268-0.327 * 0.818
=-2.94

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $0.0 Mil.
Revenue was 191.756 + 227.103 + 58.267 + 121.513 = $598.6 Mil.
Gross Profit was 106.048 + 148.068 + 13.149 + 66.947 = $334.2 Mil.
Total Current Assets was $301.2 Mil.
Total Assets was $2,948.1 Mil.
Property, Plant and Equipment(Net PPE) was $2,214.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $92.2 Mil.
Selling, General & Admin. Expense(SGA) was $9.1 Mil.
Total Current Liabilities was $232.8 Mil.
Long-Term Debt was $1,290.9 Mil.
Net Income was 14.322 + 78.906 + 88.703 + 17.427 = $199.4 Mil.
Non Operating Income was -8.781 + -9.889 + -28.781 + 11.013 = $-36.4 Mil.
Cash Flow from Operations was 82.346 + 121.468 + 67.856 + 43.121 = $314.8 Mil.
Accounts Receivable was $29.3 Mil.
Revenue was 103.937 + 144.377 + 135.099 + 135.619 = $519.0 Mil.
Gross Profit was 51.005 + 82.624 + 52.55 + 41.1 = $227.3 Mil.
Total Current Assets was $224.6 Mil.
Total Assets was $872.6 Mil.
Property, Plant and Equipment(Net PPE) was $562.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $62.1 Mil.
Selling, General & Admin. Expense(SGA) was $32.9 Mil.
Total Current Liabilities was $172.4 Mil.
Long-Term Debt was $379.0 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)
=(0 / 598.639) / (29.277 / 519.032)
=0 / 0.05640693
=0

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)
=(227.279 / 519.032) / (334.212 / 598.639)
=0.43789015 / 0.55828638
=0.7843

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 - (301.246 + 2214.882) / 2948.063) / (1 - (224.565 + 562.334) / 872.586)
=0.14651485 / 0.09819892
=1.492

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
=598.639 / 519.032
=1.1534

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))
=(62.141 / (62.141 + 562.334)) / (92.167 / (92.167 + 2214.882))
=0.09950919 / 0.03995017
=2.4908

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)
=(9.106 / 598.639) / (32.88 / 519.032)
=0.01521117 / 0.0633487
=0.2401

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)
=((1290.898 + 232.831) / 2948.063) / ((379.012 + 172.36) / 872.586)
=0.51685768 / 0.6318827
=0.818

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
=(199.358 - -36.438 - 314.791) / 2948.063
=-0.0268

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.

Frontline Ltd has a M-score of -2.94 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.

Frontline Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.78851.09510.63941.46231.19961.23830.60850.64461.47993.6933
GMI 1.08151.07850.89361.02541.04211.9671.19041.28180.60930.6236
AQI 3.68521.7870.57070.50181.27041.33041.231.43211.39940.8436
SGI 1.04170.911.5840.50591.05260.65970.84660.77411.08220.82
DEPI 0.96750.77731.09350.89671.19470.49761.49280.9590.78864.8452
SGAI 1.46591.24486.35210.34352.93960.27981.10121.2051.19170.3164
LVGI 1.00131.1970.93680.96911.00661.1021.04281.0440.99940.5204
TATA -0.0711-0.0293-0.0302-0.0599-0.0392-0.3347-0.0921-0.1077-0.1783-0.0132
M-score -1.93-2.38-3.55-2.85-2.61-3.45-3.19-3.24-2.900.23

Frontline Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1101.601611.454813.959310
GMI 0.83490.90410.92090.79060.82490.63110.60130.65720.68530.7843
AQI 1.20031.26921.74551.39941.4481.0870.79130.84360.78291.492
SGI 0.96340.91070.92610.88450.92840.88870.76490.95651.1534
DEPI 3.22044.50832.80770.23160.24820.20620.4185.5413.63682.4908
SGAI 0.66121.13861.24961.26111.42981.00421.01050.05470.06230.2401
LVGI 1.07540.99291.08470.99941.00540.63770.65690.52040.50760.818
TATA -0.1006-0.1334-0.1967-0.1783-0.1629-0.0977-0.0529-0.0071-0.0118-0.0268
M-score -2.70-2.74-3.99-2.84-3.42-2.72-3.080.60-2.20-2.94
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