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GuruFocus has detected 6 Warning Signs with Golar LNG Ltd $GLNG.
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Golar LNG Ltd (NAS:GLNG)
Beneish M-Score
-3.86 (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 -3.86 suggests that the company is not a manipulator.

GLNG' s Beneish M-Score Range Over the Past 10 Years
Min: -4.47   Max: 319.05
Current: -3.86

-4.47
319.05

During the past 13 years, the highest Beneish M-Score of Golar LNG Ltd was 319.05. The lowest was -4.47. And the median was -2.79.


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 * 0.8674+0.404 * 1.2692+0.892 * 0.7817+0.115 * 0.8155
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7538+4.679 * -0.0328-0.327 * 1.0022
=-3.86

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 23.063 + 22.267 + 18.37 + 16.557 = $80.26 Mil.
Gross Profit was -0.994 + -1.487 + -7.851 + -10.137 = $-20.47 Mil.
Total Current Assets was $725.56 Mil.
Total Assets was $4,263.08 Mil.
Property, Plant and Equipment(Net PPE) was $1,883.07 Mil.
Depreciation, Depletion and Amortization(DDA) was $72.97 Mil.
Selling, General & Admin. Expense(SGA) was $45.96 Mil.
Total Current Liabilities was $1,004.27 Mil.
Long-Term Debt was $1,320.60 Mil.
Net Income was -13.679 + -23.943 + -84.601 + -80.088 = $-202.31 Mil.
Non Operating Income was 24.401 + 4.847 + -27.471 + -24.702 = $-22.93 Mil.
Cash Flow from Operations was 7.388 + 12.142 + -63.656 + 4.452 = $-39.67 Mil.
Accounts Receivable was $4.47 Mil.
Revenue was 22.994 + 27.378 + 20.144 + 32.158 = $102.67 Mil.
Gross Profit was -2.023 + 1.475 + -16.081 + -6.086 = $-22.72 Mil.
Total Current Assets was $640.77 Mil.
Total Assets was $4,307.59 Mil.
Property, Plant and Equipment(Net PPE) was $2,349.71 Mil.
Depreciation, Depletion and Amortization(DDA) was $73.73 Mil.
Selling, General & Admin. Expense(SGA) was $33.53 Mil.
Total Current Liabilities was $967.58 Mil.
Long-Term Debt was $1,376.44 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 / 80.257) / (4.474 / 102.674)
=0 / 0.04357481
=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)
=(-22.715 / 102.674) / (-20.469 / 80.257)
=-0.2212342 / -0.25504317
=0.8674

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 - (725.562 + 1883.066) / 4263.084) / (1 - (640.773 + 2349.705) / 4307.588)
=0.388089 / 0.30576508
=1.2692

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
=80.257 / 102.674
=0.7817

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))
=(73.732 / (73.732 + 2349.705)) / (72.972 / (72.972 + 1883.066))
=0.03042456 / 0.03730602
=0.8155

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)
=(45.96 / 80.257) / (33.526 / 102.674)
=0.57266033 / 0.32652862
=1.7538

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)
=((1320.599 + 1004.271) / 4263.084) / ((1376.443 + 967.581) / 4307.588)
=0.54534933 / 0.54416161
=1.0022

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
=(-202.311 - -22.925 - -39.674) / 4263.084
=-0.0328

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 -3.86 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 local exchange's currency.

Golar LNG Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 7.06070.81810.26991.19040.27250.10650.864851.3041.04680
GMI 1.08121.22481.08840.82560.8451.00711.82561.5206-1.24530.8674
AQI 0.92810.83410.96210.45990.8663.7660.84890.88251.02121.2692
SGI 0.93731.01830.94631.12731.22871.36850.24331.06340.96720.7817
DEPI 0.93151.0441.02860.96091.07770.45913.42340.93590.80130.8155
SGAI 1.45650.93831.18391.01491.20060.54273.77180.78941.79911.7538
LVGI 0.97861.02350.93040.91770.88810.41621.141.50691.32421.0022
TATA 0.0066-0.0248-0.0205-0.0081-0.0185-0.04420.00230.00020.0678-0.0347
M-score 3.01-2.69-3.27-2.52-3.16-1.85-3.1443.95-3.59-3.87

Golar LNG Ltd Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.9371350.33840.0984.09210.20250.15441.27630.87070.88210
GMI 2.8291.53521.1856-261.4411-2.5873-1.2453-0.6120.00250.32710.8674
AQI 0.57920.92710.55740.88991.27670.9721.09071.12680.70531.2692
SGI 0.50381.0561.36961.47651.26820.96720.7420.73280.69760.7817
DEPI 1.82480.93591.37130.96990.71040.80130.74990.65480.99590.8155
SGAI 1.93420.77150.66280.78640.9741.79912.40762.02262.12131.7538
LVGI 1.591.5011.86371.75571.54151.32941.04171.29611.18371.0022
TATA -0.0044-0.0065-0.00480.00580.00630.06110.02310.03270.0283-0.0328
M-score -1.54319.05-3.27-138.01-4.93-4.47-3.45-3.47-3.45-3.86
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