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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-3.51 (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 -3.51 suggests that the company is not a manipulator.

HUSA' s Beneish M-Score Range Over the Past 10 Years
Min: -9.14   Max: 669.44
Current: -3.51

-9.14
669.44

During the past 13 years, the highest Beneish M-Score of Houston American Energy Corp was 669.44. The lowest was -9.14. And the median was -2.21.


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 * 0.0248+0.528 * 1.0514+0.404 * 3.3478+0.892 * 1.1818+0.115 * 0.3157
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5532+4.679 * -0.341-0.327 * 0.0144
=-3.51

* 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 $0.26 Mil.
Revenue was 0.089 + 0.124 + 0.114 + 0.102 = $0.43 Mil.
Gross Profit was 0.053 + 0.072 + 0.083 + 0.073 = $0.28 Mil.
Total Current Assets was $2.42 Mil.
Total Assets was $5.56 Mil.
Property, Plant and Equipment(Net PPE) was $3.13 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.76 Mil.
Selling, General & Admin. Expense(SGA) was $1.54 Mil.
Total Current Liabilities was $0.04 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -1.828 + -0.464 + -0.352 + -1.187 = $-3.83 Mil.
Non Operating Income was -0.097 + 0 + 0 + 0 = $-0.10 Mil.
Cash Flow from Operations was -0.343 + -0.295 + -0.515 + -0.685 = $-1.84 Mil.
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.



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)
=(0.262 / 0.429) / (8.934 / 0.363)
=0.61072261 / 24.61157025
=0.0248

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)
=(0.072 / 0.363) / (0.053 / 0.429)
=0.68870523 / 0.65501166
=1.0514

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 - (2.424 + 3.133) / 5.56) / (1 - (13.111 + 5.5) / 18.614)
=0.00053957 / 0.00016117
=3.3478

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
=0.429 / 0.363
=1.1818

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))
=(0.36 / (0.36 + 5.5)) / (0.757 / (0.757 + 3.133))
=0.06143345 / 0.19460154
=0.3157

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)
=(1.541 / 0.429) / (2.357 / 0.363)
=3.59207459 / 6.49311295
=0.5532

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 + 0.04) / 5.56) / ((0 + 9.314) / 18.614)
=0.00719424 / 0.50037606
=0.0144

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
=(-3.831 - -0.097 - -1.838) / 5.56
=-0.341

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 -3.51 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.50911.14450.25627.58761.17580.1336235.7140.66224.44570.0248
GMI 0.94841.08260.92251.64490.71272.23010.49710.68821.10891.0514
AQI 0.00890.72361663.64230.71370.57081.03190.00151.50170.72053.3478
SGI 1.11411.55392.13420.76412.40380.05930.35550.84431.04611.1818
DEPI 0.73541.63670.19193.66580.628329.38690.68921.75010.10470.3157
SGAI 1.5010.79040.91041.15380.714916.58242.84720.80510.65940.5532
LVGI 0.03140.60943.76660.23316.43760.066641.53340.067629.17850.0144
TATA -0.0791-0.0631-0.0436-0.00540.22940.0292-2.6837-0.2288-0.1185-0.3408
M-score -3.43-1.98668.334.10-2.09-2.43186.05-3.54-9.14-3.51

Houston American Energy Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.76830.66380.0250.747251.53554.445727.81040.98120.03310.0248
GMI -4.70040.1716-1.4426-1.8493-0.12161.10891.13541.11091.05941.0514
AQI 0.00221.50171.24811.12920.96810.72050.79621.56761.27123.3478
SGI 0.30520.84224.13215.46071.6361.04610.81960.83541.26811.1818
DEPI 1.94181.72421.39550.56580.32770.10470.060.10660.16290.3157
SGAI 2.37120.80770.15850.11360.38070.65940.85280.85060.57560.5532
LVGI 0.07360.06760.15570.422.831529.178530.09712.2890.02850.0144
TATA -0.7683-0.2288-0.2282-0.0638-0.037-0.1185-0.1747-0.3071-0.3308-0.341
M-score -10.15-3.81-2.37-0.1936.69-9.1411.60-4.29-4.24-3.51
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