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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 -1.95 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of InterDigital Inc was 3.94. The lowest was -4.66. And the median was -2.22.
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 * 1.4539||+||0.528 * 0.8128||+||0.404 * 1.1837||+||0.892 * 1.3694||+||0.115 * 0.9567|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8372||+||4.679 * -0.0372||-||0.327 * 1.132|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $134.2 Mil.|
Revenue was 77.622 + 194.234 + 57.844 + 99.683 = $429.4 Mil.
Gross Profit was 44.168 + 163.365 + 24.546 + 63.471 = $295.6 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 $38.4 Mil.
Total Current Liabilities was $217.7 Mil.
Long-Term Debt was $215.5 Mil.
Net Income was 13.512 + 78.901 + -1.861 + 14.536 = $105.1 Mil.
Non Operating Income was -3.167 + -3.602 + -0.164 + -25.206 = $-32.1 Mil.
Cash Flow from Operations was 155.748 + 33.14 + -2.859 + -0.545 = $185.5 Mil.
|Accounts Receivable was $67.4 Mil.
Revenue was 110.623 + 67.692 + 47.363 + 87.877 = $313.6 Mil.
Gross Profit was 73.837 + 34.528 + 10.488 + 56.572 = $175.4 Mil.
Total Current Assets was $879.3 Mil.
Total Assets was $1,129.6 Mil.
Property, Plant and Equipment(Net PPE) was $9.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $31.1 Mil.
Selling, General & Admin. Expense(SGA) was $33.5 Mil.
Total Current Liabilities was $126.5 Mil.
Long-Term Debt was $206.6 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)|
|=||(134.176 / 429.383)||/||(67.392 / 313.555)|
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)|
|=||(163.365 / 313.555)||/||(44.168 / 429.383)|
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 - (959.993 + 9.314) / 1297.394)||/||(1 - (879.294 + 8.97) / 1129.585)|
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))|
|=||(31.098 / (31.098 + 8.97))||/||(40.044 / (40.044 + 9.314))|
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)|
|=||(38.429 / 429.383)||/||(33.521 / 313.555)|
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)|
|=||((215.502 + 217.689) / 1297.394)||/||((206.635 + 126.547) / 1129.585)|
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|
|=||(105.088 - -32.139||-||185.484)||/||1297.394|
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 -1.95 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