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Golar LNG Ltd (NAS:GLNG)
Beneish M-Score
-4.09 (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 -4.09 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: -4.09

-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 -2.77.


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 * 0.3271+0.404 * 1.2222+0.892 * 0.6976+0.115 * 0.7368
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.1213+4.679 * 0.0269-0.327 * 1.1837
=-4.09

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 22.267 + 18.37 + 16.557 + 22.994 = $80.19 Mil.
Gross Profit was -1.487 + -7.851 + -10.137 + -2.023 = $-21.50 Mil.
Total Current Assets was $636.64 Mil.
Total Assets was $4,178.96 Mil.
Property, Plant and Equipment(Net PPE) was $1,899.45 Mil.
Depreciation, Depletion and Amortization(DDA) was $75.69 Mil.
Selling, General & Admin. Expense(SGA) was $41.09 Mil.
Total Current Liabilities was $1,333.79 Mil.
Long-Term Debt was $1,068.11 Mil.
Net Income was -23.943 + -84.601 + -80.088 + -67.609 = $-256.24 Mil.
Non Operating Income was 10.588 + -27.471 + -24.702 + -27.07 = $-68.66 Mil.
Cash Flow from Operations was 12.142 + -63.656 + 4.452 + -253.085 = $-300.15 Mil.
Accounts Receivable was $8.23 Mil.
Revenue was 27.378 + 20.144 + 32.158 + 35.272 = $114.95 Mil.
Gross Profit was 1.475 + -16.081 + -6.086 + 10.61 = $-10.08 Mil.
Total Current Assets was $388.39 Mil.
Total Assets was $4,038.97 Mil.
Property, Plant and Equipment(Net PPE) was $2,351.41 Mil.
Depreciation, Depletion and Amortization(DDA) was $68.32 Mil.
Selling, General & Admin. Expense(SGA) was $27.77 Mil.
Total Current Liabilities was $370.30 Mil.
Long-Term Debt was $1,590.90 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 / 80.188) / (8.23 / 114.952)
=0 / 0.0715951
=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)
=(-10.082 / 114.952) / (-21.498 / 80.188)
=-0.08770617 / -0.26809498
=0.3271

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 - (636.642 + 1899.446) / 4178.955) / (1 - (388.392 + 2351.408) / 4038.969)
=0.39312866 / 0.32165857
=1.2222

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
=80.188 / 114.952
=0.6976

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))
=(68.315 / (68.315 + 2351.408)) / (75.687 / (75.687 + 1899.446))
=0.02823257 / 0.03831995
=0.7368

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)
=(41.094 / 80.188) / (27.771 / 114.952)
=0.51247069 / 0.24158779
=2.1213

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)
=((1068.108 + 1333.786) / 4178.955) / ((1590.899 + 370.298) / 4038.969)
=0.57475948 / 0.48556872
=1.1837

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
=(-256.241 - -68.655 - -300.147) / 4178.955
=0.0269

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 -4.09 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

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 1.02280.92810.83410.96210.45990.8663.7660.84890.88251.0022
SGI 1.40140.93731.01830.94631.12731.22871.36850.24331.06340.9672
DEPI 1.00080.93151.0441.02860.96091.07770.45913.42340.93590.8013
SGAI 0.79761.45650.93831.18391.01491.20060.54273.77180.78941.7991
LVGI 1.00260.97861.02350.93040.91770.88810.41621.141.50691.3104
TATA -0.01770.0066-0.0248-0.0205-0.0081-0.0185-0.04420.00230.00020.0684
M-score 4.713.01-2.69-3.27-2.52-3.16-1.85-3.1443.95-3.59

Golar LNG Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.15511.9371350.33840.0984.09210.20250.15441.27630.87070
GMI 5.18352.8291.53521.1856-261.4411-2.5873-1.2453-0.6120.00250.3271
AQI 0.77620.57920.92710.55740.88991.27670.9541.09071.12681.2222
SGI 0.27760.50381.0561.36961.47651.26820.96720.7420.73280.6976
DEPI 2.05681.82480.93591.37130.96990.71040.80130.74990.65480.7368
SGAI 3.60821.93420.77150.66280.78640.9741.79912.40762.02262.1213
LVGI 1.41931.591.5011.86371.75571.54151.31551.04171.29611.1837
TATA -0.0077-0.0044-0.0065-0.00480.00580.00630.06170.02310.03270.0269
M-score -2.28-1.54319.05-3.27-138.01-4.93-4.47-3.45-3.47-4.09
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