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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.
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 -2.32.
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 * 0.8941||+||0.528 * 0.9841||+||0.404 * 0.959||+||0.892 * 0.9676||+||0.115 * 1.0031|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1219||+||4.679 * 0.0224||-||0.327 * 1.371|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $116.1 Mil.|
Revenue was 100.408 + 118.551 + 110.378 + 86.121 = $415.5 Mil.
Gross Profit was 72.045 + 87.339 + 78.753 + 51.202 = $289.3 Mil.
Total Current Assets was $1,086.3 Mil.
Total Assets was $1,448.7 Mil.
Property, Plant and Equipment(Net PPE) was $11.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $46.8 Mil.
Selling, General & Admin. Expense(SGA) was $38.5 Mil.
Total Current Liabilities was $406.6 Mil.
Long-Term Debt was $256.6 Mil.
Net Income was 24.52 + 32.602 + 29.065 + 13.79 = $100.0 Mil.
Non Operating Income was -0.3 + -0.076 + -0.188 + -15.575 = $-16.1 Mil.
Cash Flow from Operations was 0.656 + 25.295 + 1.771 + 55.984 = $83.7 Mil.
|Accounts Receivable was $134.2 Mil.
Revenue was 77.622 + 194.234 + 57.844 + 99.683 = $429.4 Mil.
Gross Profit was 43.699 + 162.962 + 24.15 + 63.471 = $294.3 Mil.
Total Current Assets was $960.0 Mil.
Total Assets was $1,297.4 Mil.
Property, Plant and Equipment(Net PPE) was $9.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.0 Mil.
Selling, General & Admin. Expense(SGA) was $35.4 Mil.
Total Current Liabilities was $217.7 Mil.
Long-Term Debt was $215.5 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)|
|=||(116.079 / 415.458)||/||(134.176 / 429.383)|
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)|
|=||(87.339 / 429.383)||/||(72.045 / 415.458)|
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 - (1086.28 + 11.072) / 1448.692)||/||(1 - (959.993 + 9.314) / 1297.394)|
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))|
|=||(40.044 / (40.044 + 9.314))||/||(46.838 / (46.838 + 11.072))|
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)|
|=||(38.467 / 415.458)||/||(35.436 / 429.383)|
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)|
|=||((256.56 + 406.582) / 1448.692)||/||((215.502 + 217.689) / 1297.394)|
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|
|=||(99.977 - -16.139||-||83.706)||/||1448.692|
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 -2.67 suggests that the company will not 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