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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-3.40 (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 -3.40 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: -3.4

-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 -1.95.


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 * 0.031+0.528 * 1.0361+0.404 * 3.1946+0.892 * 1.0446+0.115 * 0.545
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6259+4.679 * -0.2793-0.327 * 0.0134
=-3.40

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $0.26 Mil.
Revenue was 0.048 + 0.089 + 0.124 + 0.114 = $0.38 Mil.
Gross Profit was 0.038 + 0.053 + 0.072 + 0.083 = $0.25 Mil.
Total Current Assets was $2.00 Mil.
Total Assets was $5.15 Mil.
Property, Plant and Equipment(Net PPE) was $3.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.65 Mil.
Selling, General & Admin. Expense(SGA) was $1.44 Mil.
Total Current Liabilities was $0.04 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.339 + -1.828 + -0.464 + -0.352 = $-2.98 Mil.
Non Operating Income was 0 + -0.097 + 0 + 0 = $-0.10 Mil.
Cash Flow from Operations was -0.295 + -0.343 + -0.295 + -0.515 = $-1.45 Mil.
Accounts Receivable was $8.09 Mil.
Revenue was 0.102 + 0.133 + 0.057 + 0.067 = $0.36 Mil.
Gross Profit was 0.073 + 0.094 + 0.032 + 0.045 = $0.24 Mil.
Total Current Assets was $11.73 Mil.
Total Assets was $16.45 Mil.
Property, Plant and Equipment(Net PPE) was $4.72 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.49 Mil.
Selling, General & Admin. Expense(SGA) was $2.20 Mil.
Total Current Liabilities was $8.32 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 / 0.375) / (8.092 / 0.359)
=0.69866667 / 22.54038997
=0.031

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)
=(0.053 / 0.359) / (0.038 / 0.375)
=0.67966574 / 0.656
=1.0361

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 - (1.997 + 3.149) / 5.149) / (1 - (11.73 + 4.716) / 16.449)
=0.00058264 / 0.00018238
=3.1946

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
=0.375 / 0.359
=1.0446

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))
=(0.485 / (0.485 + 4.716)) / (0.65 / (0.65 + 3.149))
=0.0932513 / 0.17109766
=0.545

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)
=(1.441 / 0.375) / (2.204 / 0.359)
=3.84266667 / 6.13927577
=0.6259

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 + 0.035) / 5.149) / ((0 + 8.316) / 16.449)
=0.00679744 / 0.50556265
=0.0134

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
=(-2.983 - -0.097 - -1.448) / 5.149
=-0.2793

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 -3.40 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

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.66380.0250.747251.53554.445727.81040.98120.03310.02480.031
GMI 0.1716-1.4426-1.8493-0.12161.10891.13541.11091.05941.05141.0361
AQI 1.50171.24811.12920.96810.72050.79621.56761.27123.34783.1946
SGI 0.84224.13215.46071.6361.04610.81960.83541.26811.18181.0446
DEPI 1.72421.39550.56580.32770.10470.060.10660.16290.31570.545
SGAI 0.80770.15850.11360.38070.65940.85280.85060.57560.55320.6259
LVGI 0.06760.15570.422.831529.178530.09712.2890.02850.01440.0134
TATA -0.2288-0.2282-0.0638-0.037-0.1185-0.1747-0.3071-0.3308-0.341-0.2793
M-score -3.81-2.37-0.1936.69-9.1411.60-4.29-4.24-3.51-3.40
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