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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 -1.68 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of InterDigital Inc was 3.19. The lowest was -4.66. And the median was -2.19.
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 * 2.5588||+||0.528 * 1.3369||+||0.404 * 0.9773||+||0.892 * 0.5238||+||0.115 * 0.9999|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.8027||+||4.679 * -0.0639||-||0.327 * 0.8114|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $69.0 Mil.|
Revenue was 57.844 + 99.683 + 110.623 + 67.692 = $335.8 Mil.
Gross Profit was 24.546 + 63.471 + 73.837 + 34.528 = $196.4 Mil.
Total Current Assets was $815.4 Mil.
Total Assets was $1,080.4 Mil.
Property, Plant and Equipment(Net PPE) was $9.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.8 Mil.
Selling, General & Admin. Expense(SGA) was $34.0 Mil.
Total Current Liabilities was $105.8 Mil.
Long-Term Debt was $211.0 Mil.
Net Income was -1.861 + 14.536 + 26.66 + 9.238 = $48.6 Mil.
Non Operating Income was -0.164 + -25.206 + 0.95 + 2.899 = $-21.5 Mil.
Cash Flow from Operations was -2.859 + -0.545 + -1.03 + 143.512 = $139.1 Mil.
|Accounts Receivable was $51.5 Mil.
Revenue was 47.363 + 87.877 + 434.01 + 71.871 = $641.1 Mil.
Gross Profit was 10.488 + 56.572 + 388.459 + 45.671 = $501.2 Mil.
Total Current Assets was $761.5 Mil.
Total Assets was $1,014.7 Mil.
Property, Plant and Equipment(Net PPE) was $7.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.9 Mil.
Selling, General & Admin. Expense(SGA) was $36.0 Mil.
Total Current Liabilities was $164.3 Mil.
Long-Term Debt was $202.4 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(69.046 / 335.842)||/||(51.512 / 641.121)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(63.471 / 641.121)||/||(24.546 / 335.842)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (815.446 + 9.098) / 1080.359)||/||(1 - (761.514 + 7.318) / 1014.687)|
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.
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))|
|=||(27.94 / (27.94 + 7.318))||/||(34.757 / (34.757 + 9.098))|
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)|
|=||(34.004 / 335.842)||/||(36.01 / 641.121)|
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)|
|=||((210.992 + 105.846) / 1080.359)||/||((202.425 + 164.338) / 1014.687)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(48.573 - -21.521||-||139.078)||/||1080.359|
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 -1.68 signals that the company is likely to be a manipulator.
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
InterDigital Inc Annual Data
InterDigital Inc Quarterly Data