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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-9.14 (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.

Houston American Energy Corp has a M-score of -9.14 suggests that the company is not a manipulator.

HUSA' s 10-Year Beneish M-Score Range
Min: -9.14   Max: 669.62
Current: -9.14

-9.14
669.62

During the past 13 years, the highest Beneish M-Score of Houston American Energy Corp was 669.62. The lowest was -9.14. And the median was -2.34.


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 Houston American Energy Corp 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 * 4.4457+0.528 * 1.1089+0.404 * 0.7205+0.892 * 1.0461+0.115 * 0.1047
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6594+4.679 * -0.1185-0.327 * 29.1785
=-9.14

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $8.93 Mil.
Revenue was 0.133 + 0.057 + 0.067 + 0.106 = $0.36 Mil.
Gross Profit was 0.094 + 0.032 + 0.045 + 0.079 = $0.25 Mil.
Total Current Assets was $13.11 Mil.
Total Assets was $18.61 Mil.
Property, Plant and Equipment(Net PPE) was $5.50 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.36 Mil.
Selling, General & Admin. Expense(SGA) was $2.36 Mil.
Total Current Liabilities was $9.31 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -2.623 + -0.512 + -0.684 + -0.535 = $-4.35 Mil.
Non Operating Income was -0.4 + 0 + 0 + 0 = $-0.40 Mil.
Cash Flow from Operations was -0.268 + -0.359 + -0.42 + -0.701 = $-1.75 Mil.
Accounts Receivable was $1.92 Mil.
Revenue was 0.143 + 0.17 + 0.019 + 0.015 = $0.35 Mil.
Gross Profit was 0.113 + 0.138 + 0.008 + 0.006 = $0.27 Mil.
Total Current Assets was $9.55 Mil.
Total Assets was $13.41 Mil.
Property, Plant and Equipment(Net PPE) was $3.86 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.03 Mil.
Selling, General & Admin. Expense(SGA) was $3.42 Mil.
Total Current Liabilities was $0.23 Mil.
Long-Term Debt was $0.00 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)
=(8.934 / 0.363) / (1.921 / 0.347)
=24.61157025 / 5.53602305
=4.4457

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)
=(0.032 / 0.347) / (0.094 / 0.363)
=0.76368876 / 0.68870523
=1.1089

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 - (13.111 + 5.5) / 18.614) / (1 - (9.546 + 3.863) / 13.412)
=0.00016117 / 0.00022368
=0.7205

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
=0.363 / 0.347
=1.0461

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))
=(0.025 / (0.025 + 3.863)) / (0.36 / (0.36 + 5.5))
=0.00643004 / 0.06143345
=0.1047

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)
=(2.357 / 0.363) / (3.417 / 0.347)
=6.49311295 / 9.84726225
=0.6594

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)
=((0 + 9.314) / 18.614) / ((0 + 0.23) / 13.412)
=0.50037606 / 0.01714882
=29.1785

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
=(-4.354 - -0.4 - -1.748) / 18.614
=-0.1185

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.

Houston American Energy Corp has a M-score of -9.14 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.

Houston American Energy Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99370.50291.14450.25627.58761.17580.1336235.7140.66224.4457
GMI 0.88141.02151.08260.92251.64490.71272.23010.49710.68821.1089
AQI 27.73280.00890.72361663.64230.71370.57081.03190.00151.50170.7205
SGI 2.40271.12781.55392.13420.76412.40380.05930.35550.84431.0461
DEPI 1.0820.73541.63670.19193.66580.627529.42280.68921.75010.1047
SGAI 1.14171.38190.79040.91041.15380.714916.5392.85470.80510.6594
LVGI 1.6280.03140.60943.76660.23316.43760.066641.53340.067629.1785
TATA -0.1572-0.0791-0.0463-0.1317-0.0054-0.26010.0081-2.6837-0.2288-0.1185
M-score 8.55-3.36-1.90667.924.10-4.38-2.51186.05-3.54-9.14

Houston American Energy Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.3615235.141810.11640.23410.76830.66380.0250.747251.53554.4457
GMI -1.74751.9932-0.2377-0.01693.96790.1716-1.4426-1.8493-0.12161.1089
AQI 0.95130.00150.00120.00290.00221.50171.24811.12920.96810.7205
SGI 0.24250.35640.07830.0860.30520.84224.13215.46071.6361.0461
DEPI 1.3540.69961.92095.1071.94181.72421.39550.56580.32770.1047
SGAI 4.47082.846112.65128.93072.37120.80770.15850.11360.38070.6594
LVGI 55.71441.53340.88830.12940.07360.06760.15570.422.831529.1785
TATA -2.738-2.6837-2.0719-1.1144-0.7683-0.2288-0.2282-0.0638-0.037-0.1185
M-score -36.47186.31-7.53-10.76-5.57-3.81-2.37-0.1936.69-9.14
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