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Golar LNG Ltd (NAS:GLNG)
Beneish M-Score
-4.80 (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 -4.80 suggests that the company is not a manipulator.

GLNG' s Beneish M-Score Range Over the Past 10 Years
Min: -4.8   Max: 319.05
Current: -4.8

-4.8
319.05

During the past 13 years, the highest Beneish M-Score of Golar LNG Ltd was 319.05. The lowest was -4.80. And the median was -2.87.


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 * 0.1544+0.528 * -1.2474+0.404 * 0.972+0.892 * 0.9672+0.115 * 0.8013
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.8012+4.679 * -0.0091-0.327 * 1.3294
=-4.80

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $4.5 Mil.
Revenue was 22.994 + 27.378 + 20.144 + 32.158 = $102.7 Mil.
Gross Profit was -1.984 + 1.475 + -16.081 + -6.086 = $-22.7 Mil.
Total Current Assets was $640.8 Mil.
Total Assets was $4,307.6 Mil.
Property, Plant and Equipment(Net PPE) was $2,349.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $73.7 Mil.
Selling, General & Admin. Expense(SGA) was $33.6 Mil.
Total Current Liabilities was $967.6 Mil.
Long-Term Debt was $1,376.4 Mil.
Net Income was -70.892 + -146.123 + -2.563 + 21.918 = $-197.7 Mil.
Non Operating Income was -22.928 + -94.336 + 54.716 + -31.381 = $-93.9 Mil.
Cash Flow from Operations was 26.915 + -15.384 + -20.649 + -55.531 = $-64.6 Mil.
Accounts Receivable was $30.0 Mil.
Revenue was 35.272 + 28.834 + 21.084 + 20.966 = $106.2 Mil.
Gross Profit was 10.61 + 11.493 + 6.058 + 1.085 = $29.2 Mil.
Total Current Assets was $742.8 Mil.
Total Assets was $3,992.0 Mil.
Property, Plant and Equipment(Net PPE) was $1,993.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $49.8 Mil.
Selling, General & Admin. Expense(SGA) was $19.3 Mil.
Total Current Liabilities was $369.7 Mil.
Long-Term Debt was $1,264.4 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)
=(4.474 / 102.674) / (29.967 / 106.156)
=0.04357481 / 0.2822921
=0.1544

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)
=(1.475 / 106.156) / (-1.984 / 102.674)
=0.27550021 / -0.22085435
=-1.2474

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 - (640.773 + 2349.705) / 4307.588) / (1 - (742.838 + 1993.431) / 3991.993)
=0.30576508 / 0.31456067
=0.972

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
=102.674 / 106.156
=0.9672

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))
=(49.811 / (49.811 + 1993.431)) / (73.732 / (73.732 + 2349.705))
=0.02437841 / 0.03042456
=0.8013

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)
=(33.566 / 102.674) / (19.267 / 106.156)
=0.32691821 / 0.18149704
=1.8012

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)
=((1376.443 + 967.581) / 4307.588) / ((1264.356 + 369.69) / 3991.993)
=0.54416161 / 0.40933088
=1.3294

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
=(-197.66 - -93.929 - -64.649) / 4307.588
=-0.0091

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 -4.80 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 own currency.

Golar LNG Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 8.48777.06070.40350.54731.19040.27250.10650.864851.3041.0468
GMI 0.97571.08121.22481.08840.82560.8451.00711.82561.5206-1.2453
AQI 1.02280.92810.83410.96210.45990.8663.7660.84890.92710.972
SGI 1.40140.93731.01830.94631.12731.22871.36850.24331.06340.9672
DEPI 1.08760.8911.06181.02860.96091.07770.45913.42340.93590.8013
SGAI 0.79761.45650.93831.18391.01491.20060.54273.77180.78941.7991
LVGI 1.00260.97861.02350.93040.91770.88810.41621.141.5011.3294
TATA -0.01770.0066-0.0248-0.0083-0.0081-0.0185-0.04420.0008-0.0054-0.0062
M-score 4.723.00-3.07-2.96-2.52-3.16-1.85-3.1443.94-3.96

Golar LNG Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1521.69590.858830.33020.15511.9371350.33842.52954.09210.20250.1544
GMI 1.19621.80823.50595.18352.8291.53521.1856-261.4411-2.5873-1.2474
AQI 4.95240.84890.78460.77620.57920.92710.9460.88991.27670.972
SGI 0.45920.2450.2360.27760.50381.0561.36961.47651.26820.9672
DEPI 1.02173.42342.56222.05681.82480.93591.14380.96990.71040.8013
SGAI 1.79423.85944.24473.60821.93420.77150.66280.78640.9741.8012
LVGI 0.34931.141.52081.41931.591.5011.5691.75571.54151.3294
TATA -0.0210.00070.0139-0.0088-0.0055-0.0065-0.00380.00690.0026-0.0091
M-score 1,397.76-3.1724.57-2.29-1.55319.05-0.80-138.01-4.95-4.80
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