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Harbinger Group Inc (NYSE:HRG)
Beneish M-Score
-2.63 (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.

Harbinger Group Inc has a M-score of -2.63 suggests that the company is not a manipulator.

HRG' s 10-Year Beneish M-Score Range
Min: -3.71   Max: 537.5
Current: -2.63

-3.71
537.5

During the past 13 years, the highest Beneish M-Score of Harbinger Group Inc was 537.50. The lowest was -3.71. And the median was -2.56.


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 Harbinger Group Inc 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 * 0.8587+0.528 * 0.9995+0.404 * 1.0394+0.892 * 1.0757+0.115 * 1.0619
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1608+4.679 * -0.0194-0.327 * 0.9714
=-2.63

* 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 $460 Mil.
Revenue was 1512.4 + 1599.4 + 1341.2 + 1510 = $5,963 Mil.
Gross Profit was 714.5 + 866.8 + 662 + 774.5 = $3,018 Mil.
Total Current Assets was $2,724 Mil.
Total Assets was $30,100 Mil.
Property, Plant and Equipment(Net PPE) was $909 Mil.
Depreciation, Depletion and Amortization(DDA) was $303 Mil.
Selling, General & Admin. Expense(SGA) was $2,188 Mil.
Total Current Liabilities was $1,033 Mil.
Long-Term Debt was $5,158 Mil.
Net Income was -6.3 + 98.3 + -75.5 + -26.8 = $-10 Mil.
Non Operating Income was -11.7 + 44 + -8.1 + -58.6 = $-34 Mil.
Cash Flow from Operations was 443.5 + 246.3 + 7.5 + -89.4 = $608 Mil.
Accounts Receivable was $498 Mil.
Revenue was 1500.8 + 1409.2 + 1411.1 + 1222.3 = $5,543 Mil.
Gross Profit was 742.4 + 684.1 + 737.4 + 640.2 = $2,804 Mil.
Total Current Assets was $3,305 Mil.
Total Assets was $27,909 Mil.
Property, Plant and Equipment(Net PPE) was $993 Mil.
Depreciation, Depletion and Amortization(DDA) was $359 Mil.
Selling, General & Admin. Expense(SGA) was $1,752 Mil.
Total Current Liabilities was $1,013 Mil.
Long-Term Debt was $4,896 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)
=(460 / 5963) / (498 / 5543.4)
=0.07714238 / 0.08983656
=0.8587

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)
=(866.8 / 5543.4) / (714.5 / 5963)
=0.50584479 / 0.50608754
=0.9995

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 - (2724.4 + 908.6) / 30100.2) / (1 - (3305.1 + 993.3) / 27908.8)
=0.87930313 / 0.84598406
=1.0394

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
=5963 / 5543.4
=1.0757

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))
=(358.7 / (358.7 + 993.3)) / (302.6 / (302.6 + 908.6))
=0.26531065 / 0.24983487
=1.0619

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)
=(2188.1 / 5963) / (1752.3 / 5543.4)
=0.36694617 / 0.31610564
=1.1608

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)
=((5157.8 + 1033) / 30100.2) / ((4896.1 + 1012.7) / 27908.8)
=0.20567305 / 0.21171817
=0.9714

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
=(-10.3 - -34.4 - 607.9) / 30100.2
=-0.0194

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.

Harbinger Group Inc has a M-score of -2.63 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.

Harbinger Group Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Sep11Sep12Sep13Sep14
DSRI 1111110.20840.72981.20050.8587
GMI 1111110.39260.78041.03410.9995
AQI 4.70640.75370.66690.66690.61818.612410.32460.96670.94961.0394
SGI 00000029.49121.28841.23721.0757
DEPI 0.14160.10920.09360.09360.56140.38490.29630.57652.06421.0619
SGAI 1111113.10021.11090.82821.1608
LVGI 0.27640.05390.03170.03170.06412.91540.46960.98011.82640.9714
TATA -0.0517-0.1517-0.0012-0.0012-0.078-0.0183-0.0108-0.0159-0.0165-0.0194
M-score -1.98-3.97-3.30-3.30-3.64-1.0825.33-2.74-2.28-2.63

Harbinger Group Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.34480.54911.30431.19641.16121.20050.88634.82491.17260.8587
GMI 0.9210.81860.86670.96290.94741.03411.04221.03921.00910.9995
AQI 1.00750.96670.96860.83770.83660.94960.97041.01751.11631.0394
SGI 2.41441.71231.19941.15451.25571.23721.28521.18971.13591.0757
DEPI 0.67150.57650.92611.92541.74262.06421.92030.91081.13381.0619
SGAI 1.12711.03580.96690.90910.86520.82820.94680.95571.05591.1608
LVGI 0.94160.98011.46481.63141.71431.82641.21541.091.05230.9714
TATA -0.0182-0.0159-0.0091-0.008-0.0089-0.0165-0.0177-0.0172-0.0195-0.0194
M-score -1.99-2.49-2.30-2.37-2.36-2.28-2.361.12-2.25-2.63
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