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Golar LNG Ltd (NAS:GLNG)
Beneish M-Score
-3.48 (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.

Golar LNG Ltd has a M-score of -4.69 suggests that the company is not a manipulator.

GLNG' s Beneish M-Score Range Over the Past 10 Years
Min: -138.01   Max: 1397.76
Current: -3.48

-138.01
1397.76

During the past 13 years, the highest Beneish M-Score of Golar LNG Ltd was 1397.76. The lowest was -138.01. And the median was -2.55.


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 Golar LNG 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 * -0.6266+0.404 * 1.076+0.892 * 0.7598+0.115 * 0.7267
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.3512+4.679 * 0.0197-0.327 * 1.2373
=-4.69

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 18.645 + 22.994 + 27.378 + 20.144 = $89.16 Mil.
Gross Profit was -10.137 + -2.023 + 1.475 + -16.081 = $-26.77 Mil.
Total Current Assets was $530.37 Mil.
Total Assets was $4,284.04 Mil.
Property, Plant and Equipment(Net PPE) was $2,334.23 Mil.
Depreciation, Depletion and Amortization(DDA) was $75.48 Mil.
Selling, General & Admin. Expense(SGA) was $38.15 Mil.
Total Current Liabilities was $1,236.41 Mil.
Long-Term Debt was $1,171.87 Mil.
Net Income was -80.088 + -70.891 + -146.123 + -2.563 = $-299.67 Mil.
Non Operating Income was -24.702 + -35.09 + -94.336 + 54.716 = $-99.41 Mil.
Cash Flow from Operations was 4.452 + -253.085 + -15.384 + -20.649 = $-284.67 Mil.
Accounts Receivable was $115.45 Mil.
Revenue was 32.158 + 35.272 + 28.834 + 21.084 = $117.35 Mil.
Gross Profit was -6.086 + 10.61 + 11.493 + 6.058 = $22.08 Mil.
Total Current Assets was $578.46 Mil.
Total Assets was $4,258.53 Mil.
Property, Plant and Equipment(Net PPE) was $2,368.75 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.17 Mil.
Selling, General & Admin. Expense(SGA) was $21.36 Mil.
Total Current Liabilities was $600.69 Mil.
Long-Term Debt was $1,334.07 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 / 89.161) / (115.448 / 117.348)
=0 / 0.98380884
=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)
=(22.075 / 117.348) / (-26.766 / 89.161)
=0.18811569 / -0.30019852
=-0.6266

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 - (530.365 + 2334.232) / 4284.04) / (1 - (578.458 + 2368.749) / 4258.525)
=0.33133281 / 0.30792774
=1.076

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
=89.161 / 117.348
=0.7598

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))
=(55.173 / (55.173 + 2368.749)) / (75.479 / (75.479 + 2334.232))
=0.02276187 / 0.03132284
=0.7267

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)
=(38.15 / 89.161) / (21.355 / 117.348)
=0.42787766 / 0.18198009
=2.3512

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)
=((1171.869 + 1236.41) / 4284.04) / ((1334.072 + 600.685) / 4258.525)
=0.56215138 / 0.45432562
=1.2373

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
=(-299.665 - -99.412 - -284.666) / 4284.04
=0.0197

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.

Golar LNG Ltd has a M-score of -4.69 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.

Golar LNG Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 8.48777.06070.81810.26991.19040.27250.10650.864851.3041.0468
GMI 0.97571.08121.22481.08840.82560.8451.00711.82561.5206-1.2453
AQI 1.02280.92810.83410.96210.45990.8663.7660.84890.92710.972
SGI 1.40140.93731.01830.94631.12731.22871.36850.24331.06340.9672
DEPI 1.08760.8911.06181.02860.96091.07770.45913.42340.93590.8013
SGAI 0.79761.45650.93831.18391.01491.20060.54273.77180.78941.7991
LVGI 1.00260.97861.02350.93040.91770.88810.41621.141.5011.3294
TATA -0.01770.0066-0.0248-0.0083-0.0081-0.0185-0.04420.0008-0.00540.0588
M-score 4.723.00-2.69-3.21-2.52-3.16-1.85-3.1443.94-3.66

Golar LNG Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.858830.33020.15511.9371350.33842.52954.09210.20250.15440
GMI 1.80823.50595.18352.8291.53521.1856-261.4411-2.5873-1.2453-0.6266
AQI 0.84890.78460.77620.57920.92710.9460.88991.27670.9721.076
SGI 0.2450.2360.27760.50381.0561.36961.47651.26820.96720.7598
DEPI 3.42342.56222.05681.82480.93591.14380.96990.71040.80130.7267
SGAI 3.85944.24473.60821.93420.77150.66280.78640.9741.79912.3512
LVGI 1.141.52081.41931.591.5011.5691.75571.54151.32941.2373
TATA 0.00070.0139-0.0088-0.0055-0.0065-0.00380.00690.00260.05880.0197
M-score -3.1724.57-2.29-1.55319.05-0.80-138.01-4.95-4.48-4.69
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