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InterDigital Inc (NAS:IDCC)
Beneish M-Score
-3.75 (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 -3.75 suggests that the company is not a manipulator.

IDCC' s 10-Year Beneish M-Score Range
Min: -4.66   Max: 3.92
Current: -3.75

-4.66
3.92

During the past 13 years, the highest Beneish M-Score of InterDigital Inc was 3.92. The lowest was -4.66. And the median was -2.31.


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 * 0.3696+0.528 * 1.0589+0.404 * 1.0909+0.892 * 0.8492+0.115 * 0.9835
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2239+4.679 * -0.097-0.327 * 1.3846
=-3.75

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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 + 49.934 + 44.168 = $260.2 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 $36.5 Mil.
Total Current Liabilities was $398.4 Mil.
Long-Term Debt was $253.6 Mil.
Net Income was 32.602 + 29.065 + 13.79 + 13.512 = $89.0 Mil.
Non Operating Income was -0.076 + -0.188 + -4.699 + -3.167 = $-8.1 Mil.
Cash Flow from Operations was 25.295 + 1.771 + 55.984 + 155.748 = $238.8 Mil.
Accounts Receivable was $346.3 Mil.
Revenue was 194.234 + 57.844 + 99.683 + 110.623 = $462.4 Mil.
Gross Profit was 162.962 + 24.15 + 63.471 + 73.837 = $324.4 Mil.
Total Current Assets was $1,117.1 Mil.
Total Assets was $1,423.3 Mil.
Property, Plant and Equipment(Net PPE) was $9.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.5 Mil.
Selling, General & Admin. Expense(SGA) was $35.1 Mil.
Total Current Liabilities was $245.4 Mil.
Long-Term Debt was $213.2 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)
=(108.717 / 392.672) / (346.335 / 462.384)
=0.27686466 / 0.74902029
=0.3696

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)
=(78.753 / 462.384) / (87.339 / 392.672)
=0.70162462 / 0.66262428
=1.0589

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 - (1117.194 + 11.479) / 1461.122) / (1 - (1117.091 + 9.369) / 1423.329)
=0.22752994 / 0.2085737
=1.0909

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
=392.672 / 462.384
=0.8492

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))
=(35.545 / (35.545 + 9.369)) / (47.297 / (47.297 + 11.479))
=0.79140134 / 0.8046992
=0.9835

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)
=(36.469 / 392.672) / (35.087 / 462.384)
=0.09287395 / 0.07588282
=1.2239

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)
=((253.593 + 398.353) / 1461.122) / ((213.247 + 245.423) / 1423.329)
=0.44619546 / 0.32225157
=1.3846

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
=(88.969 - -8.13 - 238.798) / 1461.122
=-0.097

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 -3.75 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.06932.29172.03610.26554.82580.11911.09172.75311.11370.4358
GMI 11.11891.25620.98530.89010.95371.1160.94161.44460.8263
AQI 1.22530.43921.56481.36470.60161.32350.78251.00510.99651.2829
SGI 1.57332.94540.48750.97541.30171.32660.76482.19750.49071.278
DEPI 0.91891.10740.98950.81520.84230.94670.97010.97170.99041.0088
SGAI 0.89720.11282.38431.07050.5690.8611.45470.53981.70750.9439
LVGI 0.81711.24771.37461.05610.88650.73161.79490.96320.85241.1758
TATA 0.0596-0.1822-0.2025-0.1469-0.25670.01960.12340.099-0.1408-0.1023
M-score -1.47-0.49-2.93-3.78-0.02-2.70-2.400.72-3.33-3.25

InterDigital Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.75760.72193.86111.11372.55887.87151.45390.43581.07040.3696
GMI 0.93370.90951.46921.44461.33961.09660.8150.82860.81391.0589
AQI 1.030.78441.05060.99650.97730.99111.18371.28290.95551.0909
SGI 2.19122.16220.48080.49070.52380.72591.36941.2781.39460.8492
DEPI 0.97210.96781.00670.99040.99991.01830.95671.00880.98540.9835
SGAI 0.49970.42661.95071.70751.68351.4450.77960.91280.85181.2239
LVGI 1.00310.76360.68840.85240.81141.00341.1321.17581.48841.3846
TATA -0.0094-0.1512-0.0325-0.1436-0.07090.0747-0.0488-0.1085-0.0709-0.097
M-score -1.63-2.37-0.26-3.34-1.693.92-1.99-3.28-2.65-3.75
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