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Beneish M-Score 1.46 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.
Golar LNG Ltd has a M-score of 1.46 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Golar LNG Ltd was 1397.79. The lowest was -8.04. And the median was -2.53.
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 * 4.1829||+||0.528 * 5.1839||+||0.404 * 0.631||+||0.892 * 0.2776||+||0.115 * 2.3017|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 3.6081||+||4.679 * 0.0075||-||0.327 * 1.4193|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $35.84 Mil.|
Revenue was 21.084 + 20.966 + 19.757 + 17.03 = $78.84 Mil.
Gross Profit was 6.058 + 1.085 + 1.932 + 2.256 = $11.33 Mil.
Total Current Assets was $541.24 Mil.
Total Assets was $3,406.74 Mil.
Property, Plant and Equipment(Net PPE) was $1,945.53 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.67 Mil.
Selling, General & Admin. Expense(SGA) was $22.44 Mil.
Total Current Liabilities was $223.27 Mil.
Long-Term Debt was $656.88 Mil.
Net Income was -24.23 + 12.991 + 4.311 + -13.131 = $-20.06 Mil.
Non Operating Income was -16.818 + -9.578 + -29.281 + -15.381 = $-71.06 Mil.
Cash Flow from Operations was 73.372 + -80.964 + 10.248 + 22.837 = $25.49 Mil.
|Accounts Receivable was $30.87 Mil.
Revenue was 27.926 + 35.811 + 99.158 + 121.126 = $284.02 Mil.
Gross Profit was 13.835 + 24.492 + 74.925 + 98.363 = $211.62 Mil.
Total Current Assets was $250.31 Mil.
Total Assets was $2,464.08 Mil.
Property, Plant and Equipment(Net PPE) was $1,159.32 Mil.
Depreciation, Depletion and Amortization(DDA) was $61.69 Mil.
Selling, General & Admin. Expense(SGA) was $22.41 Mil.
Total Current Liabilities was $44.92 Mil.
Long-Term Debt was $403.61 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)|
|=||(35.839 / 78.837)||/||(30.867 / 284.021)|
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)|
|=||(1.085 / 284.021)||/||(6.058 / 78.837)|
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 - (541.244 + 1945.531) / 3406.735)||/||(1 - (250.311 + 1159.319) / 2464.083)|
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))|
|=||(61.693 / (61.693 + 1159.319))||/||(43.667 / (43.667 + 1945.531))|
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)|
|=||(22.444 / 78.837)||/||(22.41 / 284.021)|
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)|
|=||((656.875 + 223.272) / 3406.735)||/||((403.605 + 44.919) / 2464.083)|
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|
|=||(-20.059 - -71.058||-||25.493)||/||3406.735|
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 1.46 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
Golar LNG Ltd Annual Data
Golar LNG Ltd Quarterly Data