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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2.256 / 410.345)||/||(-0.517 / 97.379)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(135.713 - 116.602||-||53.3)||/||2662.308|
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.
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
Golar LNG, Ltd. Annual Data
Golar LNG, Ltd. Quarterly Data