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InterDigital Inc (NAS:IDCC)
Beneish M-Score
-2.12 (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 -2.12 signals that the company is a manipulator.

IDCC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.69   Max: 3.92
Current: -2.12

-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 -2.19.


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 * 1.1868+0.528 * 0.9768+0.404 * 1.6081+0.892 * 0.9369+0.115 * 1.0143
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1569+4.679 * -0.0077-0.327 * 0.7798
=-2.12

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $114.6 Mil.
Revenue was 107.764 + 112.098 + 100.408 + 118.551 = $438.8 Mil.
Gross Profit was 80.597 + 82.897 + 72.045 + 87.339 = $322.9 Mil.
Total Current Assets was $798.1 Mil.
Total Assets was $1,274.7 Mil.
Property, Plant and Equipment(Net PPE) was $12.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $49.0 Mil.
Selling, General & Admin. Expense(SGA) was $42.2 Mil.
Total Current Liabilities was $171.2 Mil.
Long-Term Debt was $262.6 Mil.
Net Income was 28.071 + 33.038 + 24.52 + 32.602 = $118.2 Mil.
Non Operating Income was -0.112 + -0.411 + -0.3 + -0.076 = $-0.9 Mil.
Cash Flow from Operations was 16.233 + 86.777 + 0.656 + 25.295 = $129.0 Mil.
Accounts Receivable was $103.1 Mil.
Revenue was 110.378 + 86.121 + 77.622 + 194.234 = $468.4 Mil.
Gross Profit was 78.753 + 51.202 + 43.699 + 162.962 = $336.6 Mil.
Total Current Assets was $1,117.1 Mil.
Total Assets was $1,457.8 Mil.
Property, Plant and Equipment(Net PPE) was $10.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $44.5 Mil.
Selling, General & Admin. Expense(SGA) was $39.0 Mil.
Total Current Liabilities was $385.7 Mil.
Long-Term Debt was $250.7 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)
=(114.608 / 438.821) / (103.069 / 468.355)
=0.26117255 / 0.22006598
=1.1868

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)
=(336.616 / 468.355) / (322.878 / 438.821)
=0.71871977 / 0.73578521
=0.9768

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 - (798.096 + 12.802) / 1274.661) / (1 - (1117.116 + 10.836) / 1457.773)
=0.36383242 / 0.2262499
=1.6081

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
=438.821 / 468.355
=0.9369

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))
=(44.535 / (44.535 + 10.836)) / (49.029 / (49.029 + 12.802))
=0.80430189 / 0.79295176
=1.0143

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)
=(42.237 / 438.821) / (38.967 / 468.355)
=0.09625109 / 0.08319971
=1.1569

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)
=((262.635 + 171.225) / 1274.661) / ((250.674 + 385.664) / 1457.773)
=0.34037285 / 0.43651378
=0.7798

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
=(118.231 - -0.899 - 128.961) / 1274.661
=-0.0077

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 -2.12 signals that the company is likely to 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 1.11891.25620.95850.8531.02291.1160.94161.44460.82630.9326
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 0.11282.38431.14361.73910.26371.45470.53981.78380.90350.9926
LVGI 1.24771.37461.05610.88650.73161.79490.96320.85241.17281.2664
TATA -0.1588-0.2481-0.1469-0.25770.02250.12340.0849-0.1408-0.11480.0039
M-score -0.38-3.14-3.80-0.24-2.54-2.400.66-3.34-3.22-2.58

InterDigital Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.11372.55887.87151.45390.43581.07040.36960.89410.98141.1868
GMI 1.44461.33961.09660.81630.82630.8121.05560.98410.93260.9768
AQI 0.99650.97730.99111.18371.48820.95551.09090.9590.93031.6081
SGI 0.49070.52380.72591.36941.2781.39460.84920.96761.06160.9369
DEPI 0.99040.99991.01830.95671.00880.98540.98351.00310.9671.0143
SGAI 1.70751.68351.4450.7720.94390.87991.26571.12190.99261.1569
LVGI 0.85240.81141.00341.1321.17281.48841.38461.3711.26640.7798
TATA -0.1436-0.07090.0747-0.0515-0.1148-0.0759-0.1020.01220.0039-0.0077
M-score -3.34-1.693.92-2.01-3.23-2.68-3.78-2.72-2.58-2.12
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