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IAC/InterActiveCorp (NAS:IACI)
Beneish M-Score
-2.39 (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 -2.39 suggests that the company is not a manipulator.

IACI' s 10-Year Beneish M-Score Range
Min: -4.45   Max: 10.93
Current: -2.39

-4.45
10.93

During the past 13 years, the highest Beneish M-Score of IAC/InterActiveCorp was 10.93. The lowest was -4.45. And the median was -2.39.

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 * 1.1066 + 0.528 * 0.9329 + 0.404 * 0.9718 + 0.892 * 1.0286 + 0.115 * 1.0186 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 1.1423 + 4.679 * 0.0111 - 0.327 * 1.0423 = -2.39

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

 This Year (Dec14) TTM: Last Year (Dec13) TTM: Accounts Receivable was \$236 Mil. Revenue was 830.754 + 782.231 + 756.315 + 740.247 = \$3,110 Mil. Gross Profit was 594.064 + 556.039 + 545.215 + 531.053 = \$2,226 Mil. Total Current Assets was \$1,554 Mil. Total Assets was \$4,275 Mil. Property, Plant and Equipment(Net PPE) was \$302 Mil. Depreciation, Depletion and Amortization(DDA) was \$119 Mil. Selling, General & Admin. Expense(SGA) was \$1,568 Mil. Total Current Liabilities was \$674 Mil. Long-Term Debt was \$1,080 Mil. Net Income was 70.172 + 326.812 + -17.996 + 35.885 = \$415 Mil. Non Operating Income was 11.371 + 3.501 + -69.75 + -1.958 = \$-57 Mil. Cash Flow from Operations was 129.387 + 145.89 + 106.067 + 42.704 = \$424 Mil. Accounts Receivable was \$207 Mil. Revenue was 724.455 + 756.872 + 799.411 + 742.249 = \$3,023 Mil. Gross Profit was 498.261 + 508.016 + 526.589 + 486.4 = \$2,019 Mil. Total Current Assets was \$1,475 Mil. Total Assets was \$4,235 Mil. Property, Plant and Equipment(Net PPE) was \$294 Mil. Depreciation, Depletion and Amortization(DDA) was \$119 Mil. Selling, General & Admin. Expense(SGA) was \$1,335 Mil. Total Current Liabilities was \$587 Mil. Long-Term Debt was \$1,080 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) = (236.086 / 3109.547) / (207.408 / 3022.987) = 0.07592296 / 0.06861029 = 1.1066

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) = (556.039 / 3022.987) / (594.064 / 3109.547) = 0.66797045 / 0.71597921 = 0.9329

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 - (1553.881 + 302.459) / 4274.878) / (1 - (1475.386 + 293.964) / 4234.684) = 0.56575603 / 0.58217662 = 0.9718

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 = 3109.547 / 3022.987 = 1.0286

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)) = (118.752 / (118.752 + 293.964)) / (119.082 / (119.082 + 302.459)) = 0.28773297 / 0.28249209 = 1.0186

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) = (1568.047 / 3109.547) / (1334.552 / 3022.987) = 0.50426863 / 0.44146799 = 1.1423

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 + 673.954) / 4274.878) / ((1080 + 586.897) / 4234.684) = 0.41029335 / 0.39362961 = 1.0423

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 = (414.873 - -56.836 - 424.048) / 4274.878 = 0.0111

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 -2.39 suggests that the company will not be a manipulator.

Related Terms

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

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 DSRI 0.9393 4.8189 0.0214 7.7757 1.0193 1.0525 1.1766 0.9546 0.8362 1.1066 GMI 0.9233 0.7663 10.7467 0.0872 0.9836 1.0684 1.0109 0.9754 0.9675 0.9329 AQI 0.881 0.988 1.0707 0.743 0.7959 1.1409 1.234 1.0703 0.9315 0.9718 SGI 1.2847 0.2002 13.244 0.1085 0.9319 1.2154 1.2582 1.36 1.0793 1.0286 DEPI 1.1161 1.0528 0.7727 2.0154 0.6015 1.6883 1.0923 0.9464 0.8549 1.0186 SGAI 1.0962 1.6088 0.0877 11.2497 0.9862 0.8921 0.9267 0.9986 0.9656 1.1423 LVGI 1.3927 1.0318 0.862 0.3505 1.3796 1.3341 1.4038 1.7135 1.2433 1.0423 TATA -0.0266 -0.0474 -0.082 -0.132 -0.356 -0.0598 -0.048 -0.0439 -0.0345 0.0111 M-score -2.63 -0.14 12.51 0.32 -4.45 -2.44 -2.32 -2.63 -2.86 -2.39

IAC/InterActiveCorp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 DSRI 1.0393 0.9546 0.9982 0.9269 0.8173 0.8362 0.9846 0.9608 1.1421 1.1066 GMI 0.9736 0.9755 0.9845 0.9908 0.9751 0.9674 0.9477 0.9288 0.9286 0.9329 AQI 1.0627 1.0703 1.0679 1.1342 0.9669 0.9315 0.9062 0.8949 0.9345 0.9718 SGI 1.3755 1.36 1.2959 1.2408 1.1638 1.0793 1.0408 0.9856 0.9802 1.0286 DEPI 1.0829 0.9464 0.9759 0.8838 0.7784 0.8549 0.8658 1.0265 1.0728 1.0186 SGAI 0.9975 1.002 0.9754 0.9755 0.96 0.9623 1.0175 1.0589 1.1133 1.1423 LVGI 1.1854 1.7135 1.7178 1.6062 1.5779 1.2433 1.2839 1.2814 1.3172 1.0423 TATA -0.0597 -0.0439 -0.0491 -0.0468 -0.0306 -0.0345 -0.0262 -0.0213 0.0239 0.0111 M-score -2.43 -2.63 -2.66 -2.71 -2.88 -2.86 -2.76 -2.81 -2.43 -2.39
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