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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-4.35 (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 -4.35 suggests that the company is not a manipulator.

HUSA' s Beneish M-Score Range Over the Past 10 Years
Min: -35.23   Max: 669.62
Current: -4.35

-35.23
669.62

During the past 13 years, the highest Beneish M-Score of Houston American Energy Corp was 669.62. The lowest was -35.23. And the median was -1.60.


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 * 0.0331+0.528 * 0.8546+0.404 * 1.2712+0.892 * 1.2681+0.115 * 0.1629
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5756+4.679 * -0.3308-0.327 * 0.0285
=-4.35

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $0.31 Mil.
Revenue was 0.124 + 0.114 + 0.102 + 0.133 = $0.47 Mil.
Gross Profit was 0.072 + 0.083 + 0.073 + 0.094 = $0.32 Mil.
Total Current Assets was $2.96 Mil.
Total Assets was $7.45 Mil.
Property, Plant and Equipment(Net PPE) was $4.48 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.66 Mil.
Selling, General & Admin. Expense(SGA) was $1.72 Mil.
Total Current Liabilities was $0.08 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.464 + -0.352 + -1.187 + -2.623 = $-4.63 Mil.
Non Operating Income was 0 + 0 + 0 + -0.4 = $-0.40 Mil.
Cash Flow from Operations was -0.295 + -0.515 + -0.685 + -0.268 = $-1.76 Mil.
Accounts Receivable was $7.34 Mil.
Revenue was 0.057 + 0.067 + 0.106 + 0.143 = $0.37 Mil.
Gross Profit was 0.032 + 0.045 + 0.079 + 0.061 = $0.22 Mil.
Total Current Assets was $12.57 Mil.
Total Assets was $18.93 Mil.
Property, Plant and Equipment(Net PPE) was $6.36 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.14 Mil.
Selling, General & Admin. Expense(SGA) was $2.35 Mil.
Total Current Liabilities was $7.04 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)
=(0.308 / 0.473) / (7.335 / 0.373)
=0.65116279 / 19.66487936
=0.0331

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)
=(0.083 / 0.373) / (0.072 / 0.473)
=0.58176944 / 0.6807611
=0.8546

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 - (2.964 + 4.48) / 7.446) / (1 - (12.57 + 6.356) / 18.93)
=0.0002686 / 0.0002113
=1.2712

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
=0.473 / 0.373
=1.2681

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))
=(0.136 / (0.136 + 6.356)) / (0.661 / (0.661 + 4.48))
=0.02094886 / 0.12857421
=0.1629

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)
=(1.716 / 0.473) / (2.351 / 0.373)
=3.62790698 / 6.30294906
=0.5756

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 + 0.079) / 7.446) / ((0 + 7.044) / 18.93)
=0.01060972 / 0.37210777
=0.0285

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
=(-4.626 - -0.4 - -1.763) / 7.446
=-0.3308

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 -4.35 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 0.88141.02151.08260.92251.64490.71270.58261.90280.68821.1089
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 8.55-3.36-1.90667.924.10-4.38-3.38186.79-3.54-9.14

Houston American Energy Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.23410.76830.66380.0250.747251.53554.445727.81040.98120.0331
GMI -0.83427.18220.6738-1.1304-1.64590.24121.10891.10521.05160.8546
AQI 0.00290.00221.50171.24811.12920.96810.72050.79621.56761.2712
SGI 0.0860.30520.84224.13215.46071.6361.04610.81960.83541.2681
DEPI 5.1071.94181.72421.39550.56580.32770.10470.060.10660.1629
SGAI 8.93072.37120.80770.15850.11360.38070.65940.85280.85060.5756
LVGI 0.12940.07360.06760.15570.422.831529.178530.09712.2890.0285
TATA -1.1144-0.7683-0.2288-0.2282-0.0638-0.037-0.1185-0.1747-0.3071-0.3308
M-score -11.19-3.87-3.55-2.21-0.0836.88-9.1411.58-4.32-4.35
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