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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-2.43 (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 -2.43 suggests that the company is not a manipulator.

HUSA' s 10-Year Beneish M-Score Range
Min: -35.62   Max: 670.87
Current: -2.43

-35.62
670.87

During the past 13 years, the highest Beneish M-Score of Houston American Energy Corp was 670.87. The lowest was -35.62. And the median was -2.01.


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 * 0.0155+0.528 * -1.5333+0.404 * 1.2481+0.892 * 4.1321+0.115 * 1.3955
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.1585+4.679 * -0.2282-0.327 * 0.1557
=-2.43

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $0.36 Mil.
Revenue was 0.106 + 0.143 + 0.17 + 0.019 = $0.44 Mil.
Gross Profit was 0.079 + 0.061 + 0.17 + 0.008 = $0.32 Mil.
Total Current Assets was $8.29 Mil.
Total Assets was $13.10 Mil.
Property, Plant and Equipment(Net PPE) was $4.80 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.03 Mil.
Selling, General & Admin. Expense(SGA) was $3.15 Mil.
Total Current Liabilities was $0.22 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.535 + -0.575 + -0.526 + -1.266 = $-2.90 Mil.
Non Operating Income was 0 + 0.018 + 0 + 0 = $0.02 Mil.
Cash Flow from Operations was -0.701 + -0.143 + -0.277 + 1.19 = $0.07 Mil.
Accounts Receivable was $5.53 Mil.
Revenue was 0.015 + 0.024 + 0.031 + 0.036 = $0.11 Mil.
Gross Profit was 0.006 + -0.172 + 0.031 + 0.017 = $-0.12 Mil.
Total Current Assets was $13.55 Mil.
Total Assets was $16.35 Mil.
Property, Plant and Equipment(Net PPE) was $2.80 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.02 Mil.
Selling, General & Admin. Expense(SGA) was $4.82 Mil.
Total Current Liabilities was $1.76 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)
=(0.355 / 0.438) / (5.527 / 0.106)
=0.81050228 / 52.14150943
=0.0155

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)
=(0.061 / 0.106) / (0.079 / 0.438)
=-1.11320755 / 0.7260274
=-1.5333

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 - (8.293 + 4.801) / 13.097) / (1 - (13.547 + 2.797) / 16.347)
=0.00022906 / 0.00018352
=1.2481

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
=0.438 / 0.106
=4.1321

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))
=(0.022 / (0.022 + 2.797)) / (0.027 / (0.027 + 4.801))
=0.00780419 / 0.00559238
=1.3955

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)
=(3.153 / 0.438) / (4.815 / 0.106)
=7.19863014 / 45.4245283
=0.1585

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 + 0.22) / 13.097) / ((0 + 1.764) / 16.347)
=0.01679774 / 0.10790971
=0.1557

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
=(-2.902 - 0.018 - 0.069) / 13.097
=-0.2282

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 -2.43 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.99370.50291.14451.61241.86281.413510.92342.49910.4113
GMI 0.88141.02151.08260.92251.64490.71272.23010.49710.6882
AQI 27.73280.00890.72361663.64230.71370.57081.03190.00151.5017
SGI 2.40271.12781.55392.13420.76412.40380.05930.35550.8443
DEPI 1.0820.73541.63670.19193.66580.627529.42280.68921.7501
SGAI 1.14171.38190.79040.91041.15380.714916.5392.85470.8051
LVGI 1.6280.03140.60943.76660.23316.43760.066641.53340.0676
TATA -0.1572-0.0791-0.0463-0.1317-0.0054-0.26010.0081-2.6837-0.2288
M-score 8.55-3.36-1.90669.16-1.17-4.167.41-28.51-3.77

Houston American Energy Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 10.92289.11167.29811.28782.493111.12213.99483.11610.41230.0155
GMI 2.55972.201423.7708-1.74751.9932-0.2377-0.0169-6.61310.1856-1.5333
AQI 1.03191.45120.65480.95130.00150.00120.00290.00221.50171.2481
SGI 0.05930.08790.12750.24250.35640.07830.0860.30520.84224.1321
DEPI 29.422811.01891.97031.3540.69961.92095.1071.94181.72421.3955
SGAI 16.534910.02768.96424.47082.846112.65128.93072.37120.80770.1585
LVGI 0.06664.665430.004955.71441.53340.88830.12940.07360.06760.1557
TATA 0.0081-0.6905-1.8195-2.738-2.6837-2.0719-1.1144-0.7683-0.2288-0.2282
M-score 7.590.16-4.84-35.62-27.72-6.60-7.30-9.00-4.04-2.43
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