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IAC/InterActiveCorp (NAS:IACI)
Beneish M-Score
-2.81 (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.

IAC/InterActiveCorp has a M-score of -2.81 suggests that the company is not a manipulator.

IACI' s 10-Year Beneish M-Score Range
Min: -4.78   Max: 16.02
Current: -2.81

-4.78
16.02

During the past 13 years, the highest Beneish M-Score of IAC/InterActiveCorp was 16.02. The lowest was -4.78. And the median was -2.53.


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 IAC/InterActiveCorp 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 * 0.9608+0.528 * 0.9262+0.404 * 0.8949+0.892 * 0.9856+0.115 * 1.0265
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0563+4.679 * -0.0219-0.327 * 1.2814
=-2.81

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $223 Mil.
Revenue was 756.315 + 740.247 + 724.455 + 756.872 = $2,978 Mil.
Gross Profit was 545.215 + 531.053 + 501.881 + 508.016 = $2,086 Mil.
Total Current Assets was $1,477 Mil.
Total Assets was $4,167 Mil.
Property, Plant and Equipment(Net PPE) was $291 Mil.
Depreciation, Depletion and Amortization(DDA) was $111 Mil.
Selling, General & Admin. Expense(SGA) was $1,423 Mil.
Total Current Liabilities was $588 Mil.
Long-Term Debt was $1,080 Mil.
Net Income was -17.996 + 35.885 + 76.917 + 96.94 = $192 Mil.
Non Operating Income was -69.75 + -1.958 + 9.743 + 13.466 = $-48 Mil.
Cash Flow from Operations was 106.067 + 42.704 + 86.631 + 96.067 = $331 Mil.
Accounts Receivable was $236 Mil.
Revenue was 799.411 + 742.249 + 765.251 + 714.47 = $3,021 Mil.
Gross Profit was 526.589 + 486.4 + 494.974 + 452.538 = $1,961 Mil.
Total Current Assets was $1,071 Mil.
Total Assets was $3,812 Mil.
Property, Plant and Equipment(Net PPE) was $289 Mil.
Depreciation, Depletion and Amortization(DDA) was $114 Mil.
Selling, General & Admin. Expense(SGA) was $1,367 Mil.
Total Current Liabilities was $611 Mil.
Long-Term Debt was $580 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)
=(223.436 / 2977.889) / (235.95 / 3021.381)
=0.07503168 / 0.07809343
=0.9608

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)
=(531.053 / 3021.381) / (545.215 / 2977.889)
=0.6488758 / 0.70055163
=0.9262

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 - (1477.432 + 291.289) / 4167.478) / (1 - (1070.735 + 289.493) / 3812.491)
=0.5755896 / 0.64321804
=0.8949

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
=2977.889 / 3021.381
=0.9856

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))
=(114.333 / (114.333 + 289.493)) / (110.945 / (110.945 + 291.289))
=0.28312441 / 0.27582203
=1.0265

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)
=(1423.328 / 2977.889) / (1367.153 / 3021.381)
=0.47796543 / 0.45249275
=1.0563

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)
=((1080 + 587.73) / 4167.478) / ((580 + 610.656) / 3812.491)
=0.40017728 / 0.31230395
=1.2814

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
=(191.746 - -48.499 - 331.469) / 4167.478
=-0.0219

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.

IAC/InterActiveCorp has a M-score of -2.81 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.

IAC/InterActiveCorp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.31090.95340.99270.90081.94860.50090.9871.17660.95460.8362
GMI 0.83051.19210.93721.03470.73360.9531.05631.01090.97630.9649
AQI 0.96950.88580.98871.03130.76040.82091.10591.2341.07030.9315
SGI 0.97860.92911.09111.01530.22670.9521.18971.25821.361.0793
DEPI 0.94681.27731.22721.11461.3750.60821.6821.09230.94640.8549
SGAI 1.21220.83061.271.00931.49431.03320.88960.92671.00970.9565
LVGI 1.10651.59650.96070.85470.3611.32211.36891.40381.71351.2433
TATA -0.0423-0.0191-0.0358-0.0464-0.126-0.347-0.0606-0.0505-0.042-0.0352
M-score -2.59-2.75-2.62-2.68-2.96-4.86-2.56-2.33-2.62-2.86

IAC/InterActiveCorp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.05431.1911.02570.95460.99820.92690.81730.83620.98460.9608
GMI 0.9850.96970.96780.97630.98530.99220.97680.96490.94530.9262
AQI 1.2480.94811.06271.07031.06791.13420.96690.93150.90620.8949
SGI 1.3091.35761.39371.361.29591.24081.16381.07931.04080.9856
DEPI 1.01590.92421.04710.94640.97590.88380.77840.85490.86581.0265
SGAI 0.98051.00831.01891.00970.98270.97550.95520.95651.01151.0563
LVGI 1.27481.3611.18541.71351.71781.60621.57791.24331.28391.2814
TATA -0.0471-0.0515-0.0612-0.042-0.0475-0.0455-0.0296-0.0352-0.0269-0.0219
M-score -2.37-2.39-2.44-2.62-2.65-2.70-2.87-2.86-2.76-2.81
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