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Golar LNG Ltd (NAS:GLNG)
Beneish M-Score
-0.80 (As of Today)

Warning Sign:

Beneish M-Score -0.80 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 -0.80 signals that the company is a manipulator.

GLNG' s 10-Year Beneish M-Score Range
Min: -8   Max: 1397.79
Current: -0.8

-8
1397.79

During the past 13 years, the highest Beneish M-Score of Golar LNG Ltd was 1397.79. The lowest was -8.00. 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 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 * 2.5295+0.528 * 1.1856+0.404 * 0.946+0.892 * 1.3696+0.115 * 1.1438
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6628+4.679 * -0.004-0.327 * 1.569
=-0.80

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $115.4 Mil.
Revenue was 32.158 + 35.272 + 28.834 + 21.084 = $117.3 Mil.
Gross Profit was -6.086 + 10.61 + 11.493 + 6.058 = $22.1 Mil.
Total Current Assets was $578.5 Mil.
Total Assets was $4,258.5 Mil.
Property, Plant and Equipment(Net PPE) was $2,368.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.2 Mil.
Selling, General & Admin. Expense(SGA) was $21.4 Mil.
Total Current Liabilities was $600.7 Mil.
Long-Term Debt was $1,334.1 Mil.
Net Income was 21.918 + -39.651 + 7.769 + -24.23 = $-34.2 Mil.
Non Operating Income was -30.436 + -27.841 + 7.077 + -16.335 = $-67.5 Mil.
Cash Flow from Operations was -55.531 + 13.489 + 18.976 + 73.372 = $50.3 Mil.
Accounts Receivable was $33.3 Mil.
Revenue was 20.966 + 19.758 + 17.03 + 27.926 = $85.7 Mil.
Gross Profit was 1.085 + 1.933 + 2.256 + 13.835 = $19.1 Mil.
Total Current Assets was $308.0 Mil.
Total Assets was $2,697.3 Mil.
Property, Plant and Equipment(Net PPE) was $1,511.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.4 Mil.
Selling, General & Admin. Expense(SGA) was $23.5 Mil.
Total Current Liabilities was $230.9 Mil.
Long-Term Debt was $550.1 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)
=(115.448 / 117.348) / (33.324 / 85.68)
=0.98380884 / 0.38893557
=2.5295

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)
=(10.61 / 85.68) / (-6.086 / 117.348)
=0.22302754 / 0.18811569
=1.1856

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 - (578.458 + 2368.749) / 4258.525) / (1 - (308.015 + 1511.307) / 2697.311)
=0.30792774 / 0.32550529
=0.946

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
=117.348 / 85.68
=1.3696

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))
=(40.4 / (40.4 + 1511.307)) / (55.173 / (55.173 + 2368.749))
=0.02603584 / 0.02276187
=1.1438

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)
=(21.355 / 117.348) / (23.525 / 85.68)
=0.18198009 / 0.27456816
=0.6628

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)
=((1334.072 + 600.685) / 4258.525) / ((550.12 + 230.91) / 2697.311)
=0.45432562 / 0.28955875
=1.569

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
=(-34.194 - -67.535 - 50.306) / 4258.525
=-0.004

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 -0.80 signals that the company is likely to 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.58638.48777.06070.30080.73411.19040.27250.10650.864851.304
GMI 1.01310.97571.08121.03741.28510.82560.8451.00711.82561.5206
AQI 0.95011.02280.92810.83410.96210.45990.8663.7660.84890.9271
SGI 1.04671.40140.93731.36590.70551.12731.22871.36850.24331.0634
DEPI 0.8881.00080.93151.0441.02860.96091.07770.45913.42340.9359
SGAI 1.37810.79761.45650.69951.5881.01491.20060.54273.77180.7894
LVGI 0.99851.00260.97861.02350.93040.91770.88810.41621.141.501
TATA 0.00130.00260.0066-0.0248-0.0205-0.0081-0.0185-0.04420.0008-0.0054
M-score -2.904.813.01-2.91-3.02-2.52-3.16-1.85-3.1443.94

Golar LNG Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 44.4492289.08011521.69590.858830.33020.15511.9371350.33842.52956.5162
GMI 0.95591.02051.19621.80823.50595.18352.8291.53521.1856-261.4411
AQI 4.65014.77654.95240.84890.78460.6310.57920.92710.9461.0946
SGI 1.15110.81510.45920.2450.2360.27760.50381.0561.36961.4765
DEPI 0.51120.69861.02173.42342.56222.30171.82480.93591.14380.8667
SGAI 0.63890.94041.79423.85944.24473.60821.93420.77150.66280.7864
LVGI 0.31630.2870.34931.141.52081.41931.591.5011.5691.7557
TATA -0.0202-0.0147-0.0150.00620.0218-0.0046-0.0037-0.0049-0.0040.0066
M-score 39.21264.071,397.79-3.1524.61-2.30-1.54319.06-0.80-135.71
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