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InterDigital Inc (NAS:IDCC)
Beneish M-Score
-2.91 (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.

InterDigital Inc has a M-score of -2.91 suggests that the company is not a manipulator.

IDCC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.69   Max: 3.92
Current: -2.91

-4.69
3.92

During the past 13 years, the highest Beneish M-Score of InterDigital Inc was 3.92. The lowest was -4.69. And the median was -2.23.


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 InterDigital Inc 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 * 0.9498+0.528 * 0.9299+0.404 * 1.4702+0.892 * 1.0089+0.115 * 0.99
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.097+4.679 * -0.1143-0.327 * 0.9715
=-2.91

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $104.2 Mil.
Revenue was 75.915 + 107.764 + 112.098 + 100.408 = $396.2 Mil.
Gross Profit was 47.63 + 80.597 + 82.897 + 72.045 = $283.2 Mil.
Total Current Assets was $966.5 Mil.
Total Assets was $1,469.7 Mil.
Property, Plant and Equipment(Net PPE) was $11.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $50.3 Mil.
Selling, General & Admin. Expense(SGA) was $41.7 Mil.
Total Current Liabilities was $371.4 Mil.
Long-Term Debt was $265.7 Mil.
Net Income was 39.994 + 28.071 + 33.038 + 24.52 = $125.6 Mil.
Non Operating Income was -0.706 + -0.112 + -0.411 + -0.3 = $-1.5 Mil.
Cash Flow from Operations was 191.434 + 16.233 + 86.777 + 0.656 = $295.1 Mil.
Accounts Receivable was $108.7 Mil.
Revenue was 118.551 + 110.378 + 86.121 + 77.622 = $392.7 Mil.
Gross Profit was 87.339 + 78.753 + 51.202 + 43.699 = $261.0 Mil.
Total Current Assets was $1,117.2 Mil.
Total Assets was $1,461.1 Mil.
Property, Plant and Equipment(Net PPE) was $11.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.3 Mil.
Selling, General & Admin. Expense(SGA) was $37.7 Mil.
Total Current Liabilities was $398.4 Mil.
Long-Term Debt was $253.6 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)
=(104.181 / 396.185) / (108.717 / 392.672)
=0.26296049 / 0.27686466
=0.9498

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)
=(260.993 / 392.672) / (283.169 / 396.185)
=0.66465905 / 0.71473933
=0.9299

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 - (966.481 + 11.583) / 1469.711) / (1 - (1117.194 + 11.479) / 1461.122)
=0.33451951 / 0.22752994
=1.4702

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
=396.185 / 392.672
=1.0089

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))
=(47.297 / (47.297 + 11.479)) / (50.312 / (50.312 + 11.583))
=0.8046992 / 0.81286049
=0.99

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)
=(41.74 / 396.185) / (37.713 / 392.672)
=0.10535482 / 0.09604199
=1.097

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)
=((265.728 + 371.375) / 1469.711) / ((253.593 + 398.353) / 1461.122)
=0.43348862 / 0.44619546
=0.9715

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
=(125.623 - -1.529 - 295.1) / 1469.711
=-0.1143

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.

InterDigital Inc has a M-score of -2.91 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.

InterDigital Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 2.29172.03610.26554.82580.11911.09172.75311.11370.43580.9814
GMI 1.11891.25620.98530.89010.95371.1160.94161.44460.82630.9326
AQI 0.43921.56481.36470.60161.32350.78251.00510.99651.48820.9303
SGI 2.94540.48750.97541.30171.32660.76482.19750.49071.2781.0616
DEPI 1.10740.98950.81520.84230.94670.97010.97170.99041.00880.967
SGAI 0.11282.38431.07050.5690.8611.45470.53981.70750.94390.9926
LVGI 1.24771.37461.05610.88650.73161.79490.96320.85241.17281.2664
TATA -0.1588-0.2481-0.1469-0.25670.01960.13440.0894-0.1419-0.11480.0039
M-score -0.38-3.14-3.78-0.02-2.70-2.340.68-3.33-3.23-2.58

InterDigital Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 2.55887.87151.45390.43581.07040.36960.89410.98141.18680.9498
GMI 1.33961.09660.81630.82630.8121.05560.98410.93260.97680.9299
AQI 0.97730.99111.18371.48820.95551.09090.9590.93031.60811.4702
SGI 0.52380.72591.36941.2781.39460.84920.96761.06160.93691.0089
DEPI 0.99991.01830.95671.00880.98540.98351.00310.9671.01430.99
SGAI 1.68351.4450.7720.94390.87991.26571.12190.99261.15691.097
LVGI 0.81141.00341.1321.17281.48841.38461.3711.26640.77980.9715
TATA -0.07090.0747-0.0515-0.1148-0.0759-0.09670.01750.0091-0.0017-0.1143
M-score -1.693.92-2.01-3.23-2.68-3.75-2.69-2.55-2.09-2.91
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