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Golar LNG Ltd (NAS:GLNG)
Beneish M-Score
-1.54 (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 -1.54 signals that the company is a manipulator.

GLNG' s 10-Year Beneish M-Score Range
Min: -8   Max: 1397.79
Current: -1.54

-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 -2.75.


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 * 1.9371+0.528 * 2.829+0.404 * 0.5792+0.892 * 0.5038+0.115 * 1.8248
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.9342+4.679 * -0.0042-0.327 * 1.59
=-1.54

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $32.05 Mil.
Revenue was 28.834 + 21.084 + 20.966 + 19.758 = $90.64 Mil.
Gross Profit was 11.493 + 6.058 + 1.085 + 1.933 = $20.57 Mil.
Total Current Assets was $447.14 Mil.
Total Assets was $3,617.68 Mil.
Property, Plant and Equipment(Net PPE) was $2,259.11 Mil.
Depreciation, Depletion and Amortization(DDA) was $46.24 Mil.
Selling, General & Admin. Expense(SGA) was $22.48 Mil.
Total Current Liabilities was $140.30 Mil.
Long-Term Debt was $999.28 Mil.
Net Income was 7.769 + -24.23 + 12.991 + 4.311 = $0.84 Mil.
Non Operating Income was 7.077 + -16.335 + -9.578 + 13.295 = $-5.54 Mil.
Cash Flow from Operations was 18.976 + 73.372 + -80.964 + 10.248 = $21.63 Mil.
Accounts Receivable was $32.84 Mil.
Revenue was 17.03 + 27.926 + 35.811 + 99.158 = $179.93 Mil.
Gross Profit was 2.256 + 13.835 + 24.492 + 74.925 = $115.51 Mil.
Total Current Assets was $132.70 Mil.
Total Assets was $2,427.24 Mil.
Property, Plant and Equipment(Net PPE) was $1,238.74 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.06 Mil.
Selling, General & Admin. Expense(SGA) was $23.07 Mil.
Total Current Liabilities was $78.46 Mil.
Long-Term Debt was $402.41 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)
=(32.051 / 90.642) / (32.843 / 179.925)
=0.35359988 / 0.18253717
=1.9371

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)
=(6.058 / 179.925) / (11.493 / 90.642)
=0.6419786 / 0.22692571
=2.829

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 - (447.141 + 2259.109) / 3617.682) / (1 - (132.704 + 1238.741) / 2427.239)
=0.25193812 / 0.43497735
=0.5792

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
=90.642 / 179.925
=0.5038

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))
=(47.061 / (47.061 + 1238.741)) / (46.239 / (46.239 + 2259.109))
=0.0366005 / 0.02005728
=1.8248

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)
=(22.483 / 90.642) / (23.073 / 179.925)
=0.24804175 / 0.12823677
=1.9342

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)
=((999.275 + 140.301) / 3617.682) / ((402.413 + 78.461) / 2427.239)
=0.31500171 / 0.19811564
=1.59

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
=(0.841 - -5.541 - 21.632) / 3617.682
=-0.0042

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 -1.54 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.31230.58638.48777.06070.30080.73411.19040.27250.10650.8648
GMI 0.98811.01310.97571.08121.03741.28510.82560.8451.00711.8256
AQI 1.0250.95011.02280.92810.83410.96210.45990.8663.7660.8489
SGI 1.23081.04671.40140.93731.36590.70551.12731.22871.36850.2433
DEPI 0.98630.8881.00080.93151.0441.02860.96091.07770.45913.4234
SGAI 0.96421.37810.79761.45650.69951.5881.01491.20060.54273.7718
LVGI 1.01220.99851.00260.97861.02350.93040.91770.88810.41621.14
TATA -0.00040.00130.00260.0066-0.0248-0.0205-0.0081-0.0185-0.04420.0008
M-score -2.90-2.904.813.01-2.91-3.02-2.52-3.16-1.85-3.14

Golar LNG Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.59740.11580.106544.4492289.08011521.69590.858830.33020.15511.9371
GMI 0.96140.98771.00730.95591.02051.19621.80823.50595.18352.829
AQI 0.83360.83643.7664.65014.77654.95240.84890.78460.6310.5792
SGI 1.26021.38041.36851.15110.81510.45920.2450.2360.27760.5038
DEPI 1.05050.94550.45910.51120.69861.02173.42342.56222.30171.8248
SGAI 0.70670.64940.54270.63890.94041.79423.85944.24473.60821.9342
LVGI 1.03070.92060.41620.31630.2870.34931.141.52081.41931.59
TATA -0.0219-0.0141-0.0442-0.0202-0.0147-0.0150.00620.0211-0.0052-0.0042
M-score -2.76-3.01-1.8539.21264.071,397.79-3.1524.61-2.30-1.54
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