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Golar LNG, Ltd. (NAS:GLNG)
Beneish M-Score
1403.13 (As of Today)

Warning Sign:

Beneish M-Score 1403.13 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 0.22 signals that the company is a manipulator.

GLNG' s 10-Year Beneish M-Score Range
Min: -8   Max: 1403.13
Current: 1403.13

-8
1403.13

During the past 13 years, the highest Beneish M-Score of Golar LNG, Ltd. was 1403.13. The lowest was -8.00. And the median was -2.78.


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 * 4.496+0.528 * 1.8916+0.404 * 0.8498+0.892 * 0.2373+0.115 * 3.4234
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 3.4541+4.679 * -0.0128-0.327 * 1.1312
=0.22

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $6.31 Mil.
Revenue was 17.308 + 17.03 + 27.926 + 35.115 = $97.38 Mil.
Gross Profit was -0.517 + 2.256 + 13.835 + 23.796 = $39.37 Mil.
Total Current Assets was $178.78 Mil.
Total Assets was $2,662.31 Mil.
Property, Plant and Equipment(Net PPE) was $1,579.24 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.87 Mil.
Selling, General & Admin. Expense(SGA) was $20.50 Mil.
Total Current Liabilities was $84.17 Mil.
Long-Term Debt was $636.24 Mil.
Net Income was 4.311 + -13.131 + 58.969 + 85.564 = $135.71 Mil.
Non Operating Income was 13.295 + -15.381 + 48 + 70.688 = $116.60 Mil.
Cash Flow from Operations was 10.248 + 22.837 + 17.73 + 2.485 = $53.30 Mil.
Accounts Receivable was $5.92 Mil.
Revenue was 99.158 + 121.126 + 106.992 + 83.069 = $410.35 Mil.
Gross Profit was 74.925 + 98.363 + 86.119 + 54.413 = $313.82 Mil.
Total Current Assets was $439.93 Mil.
Total Assets was $2,414.40 Mil.
Property, Plant and Equipment(Net PPE) was $1,009.47 Mil.
Depreciation, Depletion and Amortization(DDA) was $85.52 Mil.
Selling, General & Admin. Expense(SGA) was $25.01 Mil.
Total Current Liabilities was $87.06 Mil.
Long-Term Debt was $490.51 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)
=(6.311 / 97.379) / (5.915 / 410.345)
=0.06480863 / 0.0144147
=4.496

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)
=(2.256 / 410.345) / (-0.517 / 97.379)
=0.76477111 / 0.40429661
=1.8916

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 - (178.783 + 1579.24) / 2662.308) / (1 - (439.925 + 1009.474) / 2414.399)
=0.33966205 / 0.39968539
=0.8498

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
=97.379 / 410.345
=0.2373

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))
=(85.524 / (85.524 + 1009.474)) / (36.871 / (36.871 + 1579.24))
=0.07810425 / 0.02281465
=3.4234

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)
=(20.503 / 97.379) / (25.013 / 410.345)
=0.21054848 / 0.06095602
=3.4541

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)
=((636.244 + 84.174) / 2662.308) / ((490.506 + 87.059) / 2414.399)
=0.27059904 / 0.23921688
=1.1312

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
=(135.713 - 116.602 - 53.3) / 2662.308
=-0.0128

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 0.22 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 0.42180.4069.60425.95170.36951.10120.76120.37111.01994.496
GMI 0.98811.01310.97571.08121.03741.28510.82560.8451.00711.8916
AQI 1.0250.95011.02280.92810.83410.96210.45990.8663.7660.8498
SGI 1.23081.04671.40140.93731.36590.70551.12731.22871.36850.2373
DEPI 0.98630.8881.00080.93151.0441.02860.96091.07770.45913.4234
SGAI 0.96421.37810.79761.45650.69951.5881.01491.20060.54273.4541
LVGI 1.01220.99851.00260.97861.02350.93040.91770.88810.41621.1312
TATA -0.00040.00130.00260.0066-0.0248-0.0205-0.0081-0.0185-0.04420.0008
M-score -2.80-3.075.841.98-2.85-2.69-2.91-3.07-1.010.28

Golar LNG, Ltd. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.37110.16630.59740.11581.019944.5346289.79021527.60514.496
GMI 0.84480.92630.96140.98771.00730.95641.02141.19881.8916
AQI 0.8660.76340.83360.83643.7664.65014.77654.95240.8498
SGI 1.22871.22171.26021.38041.36851.14890.81310.45740.2373
DEPI 1.07771.14891.05050.94550.45910.51120.69861.02173.4234
SGAI 1.20060.93890.70670.64940.54270.62110.91341.74693.4541
LVGI 0.88810.92081.03070.92060.41620.31630.2870.34931.1312
TATA -0.0185-0.011-0.0219-0.0141-0.0442-0.041-0.0353-0.0359-0.0128
M-score -3.07-3.18-2.76-3.01-1.0139.20264.631,403.130.22
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