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Harbinger Group, Inc. (NYSE:HRG)
Beneish M-Score
-2.36 (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 -2.36 suggests that the company is not a manipulator.

HRG' s 10-Year Beneish M-Score Range
Min: -6.49   Max: 537.5
Current: -2.36

-6.49
537.5

During the past 13 years, the highest Beneish M-Score of Harbinger Group, Inc. was 537.50. The lowest was -6.49. And the median was -2.43.


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 * 0.8863+0.528 * 1.0422+0.404 * 0.9704+0.892 * 1.2852+0.115 * 1.9203
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9468+4.679 * -0.0177-0.327 * 1.2154
=-2.36

* 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 $646 Mil.
Revenue was 1510 + 1498.6 + 1410.6 + 1411.9 = $5,831 Mil.
Gross Profit was 774.5 + 740.2 + 685.5 + 738.2 = $2,938 Mil.
Total Current Assets was $2,783 Mil.
Total Assets was $28,764 Mil.
Property, Plant and Equipment(Net PPE) was $1,010 Mil.
Depreciation, Depletion and Amortization(DDA) was $334 Mil.
Selling, General & Admin. Expense(SGA) was $1,966 Mil.
Total Current Liabilities was $892 Mil.
Long-Term Debt was $5,166 Mil.
Net Income was -26.8 + -190.2 + 103.6 + -33.3 = $-147 Mil.
Non Operating Income was -58.6 + -181.4 + 56.8 + -42.8 = $-226 Mil.
Cash Flow from Operations was -89.4 + 428.3 + 181.4 + 67.9 = $588 Mil.
Accounts Receivable was $567 Mil.
Revenue was 1222.3 + 1196.8 + 1012.2 + 1105.7 = $4,537 Mil.
Gross Profit was 640.2 + 644.1 + 479.1 + 619.4 = $2,383 Mil.
Total Current Assets was $2,503 Mil.
Total Assets was $26,859 Mil.
Property, Plant and Equipment(Net PPE) was $328 Mil.
Depreciation, Depletion and Amortization(DDA) was $300 Mil.
Selling, General & Admin. Expense(SGA) was $1,616 Mil.
Total Current Liabilities was $736 Mil.
Long-Term Debt was $3,918 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)
=(645.5 / 5831.1) / (566.7 / 4537)
=0.11069952 / 0.12490633
=0.8863

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)
=(740.2 / 4537) / (774.5 / 5831.1)
=0.52519286 / 0.50391864
=1.0422

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 - (2783.1 + 1009.7) / 28764) / (1 - (2502.6 + 328) / 26858.8)
=0.86814073 / 0.89461182
=0.9704

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
=5831.1 / 4537
=1.2852

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))
=(299.8 / (299.8 + 328)) / (334.2 / (334.2 + 1009.7))
=0.47754062 / 0.24867922
=1.9203

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)
=(1965.9 / 5831.1) / (1615.5 / 4537)
=0.33714051 / 0.35607229
=0.9468

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)
=((5165.9 + 891.8) / 28764) / ((3917.8 + 736.2) / 26858.8)
=0.21060006 / 0.17327654
=1.2154

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
=(-146.7 - -226 - 588.2) / 28764
=-0.0177

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 -2.36 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Sep11Sep12Sep13
DSRI 11111110.23050.81581.1924
GMI 11111110.39260.78041.0341
AQI 2.02944.70640.75370.66690.66690.61818.612410.32460.96670.9496
SGI 000000029.49121.28841.2372
DEPI 199.06680.14160.10920.09360.09360.56140.38490.29630.57652.0642
SGAI 11111113.10021.11090.8282
LVGI 0.80130.27640.05390.03170.03170.06412.91540.46960.98011.8264
TATA -0.0839-0.0517-0.1517-0.0012-0.0012-0.078-0.0183-0.0108-0.0159-0.0165
M-score 19.49-1.98-3.97-3.30-3.30-3.64-1.0825.35-2.66-2.29

Harbinger Group, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.17050.1220.18250.43150.61381.15875.54865.5411.19240.8863
GMI 0.5490.51650.74030.9210.81860.86670.96270.94711.03411.0422
AQI 12.13712.1651.59741.00750.96670.96860.83770.83660.94960.9704
SGI 83.2872120.39966.0452.41441.71231.19941.15461.25621.23721.2852
DEPI -0.2216-0.15820.44430.67150.57650.92611.92541.74262.06421.9203
SGAI 54.097254.06561.08321.12711.03580.96690.90940.8660.82820.9468
LVGI 0.63320.63330.18780.94160.98011.46481.63141.71431.82641.2154
TATA -0.0103-0.0093-0.0161-0.0182-0.0159-0.0091-0.0072-0.0089-0.0165-0.0177
M-score 65.2298.291.48-1.91-2.43-2.441.641.67-2.29-2.36
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