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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-3.05 (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: -35.01   Max: 668.31
Current: -3.05

-35.01
668.31

During the past 13 years, the highest Beneish M-Score of Houston American Energy Corp was 668.31. The lowest was -35.01. And the median was -1.98.


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 * -0.3408-0.327 * 0.0144
=-3.51

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $0.26 Mil.
Revenue was $0.43 Mil.
Gross Profit was $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 $-3.83 Mil.
Non Operating Income was $-0.10 Mil.
Cash Flow from Operations was $-1.84 Mil.
Accounts Receivable was $8.93 Mil.
Revenue was $0.36 Mil.
Gross Profit was $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)
=(0.25 / 0.363) / (0.281 / 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
=(-3.83 - -0.097 - -1.838) / 5.56
=-0.3408

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 local exchange's currency.

Houston American Energy Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.50291.14450.25627.58761.17580.1336235.7140.66224.44570.0248
GMI 1.02151.08260.92251.64490.71272.23010.49710.68821.10891.0514
AQI 0.00890.72361663.64230.71370.57081.03190.00151.50170.72053.3478
SGI 1.12781.55392.13420.76412.40380.05930.35550.84431.04611.1818
DEPI 0.73541.63670.19193.66580.627529.42280.68921.75010.10470.3157
SGAI 1.38190.79040.91041.15380.714916.5392.85470.80510.65940.5532
LVGI 0.03140.60943.76660.23316.43760.066641.53340.067629.17850.0144
TATA -0.0791-0.0631-0.0436-0.0054-0.26010.0081-2.6837-0.2288-0.1185-0.3408
M-score -3.36-1.98668.334.10-4.38-2.51186.05-3.54-9.14-3.51
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