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InterDigital Inc (NAS:IDCC)
Beneish M-Score
-1.95 (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 -1.95 signals that the company is a manipulator.

IDCC' s 10-Year Beneish M-Score Range
Min: -4.66   Max: 3.94
Current: -1.95

-4.66
3.94

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.


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 * 1.4539+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
=-1.95

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

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

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)
=(134.176 / 429.383) / (67.392 / 313.555)
=0.31248559 / 0.2149288
=1.4539

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)
=(163.365 / 313.555) / (44.168 / 429.383)
=0.55947123 / 0.68831323
=0.8128

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 - (959.993 + 9.314) / 1297.394) / (1 - (879.294 + 8.97) / 1129.585)
=0.25288155 / 0.21363687
=1.1837

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
=429.383 / 313.555
=1.3694

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))
=0.77613058 / 0.81129705
=0.9567

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)
=0.08949819 / 0.10690628
=0.8372

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)
=0.33389317 / 0.29495965
=1.132

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
=(105.088 - -32.139 - 185.484) / 1297.394
=-0.0372

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.


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.33911.06932.29172.03610.26554.82580.11911.09172.75311.1137
GMI 111.11891.25620.98530.82981.02291.1160.94161.4446
AQI 1.55671.22530.43921.56481.36470.60161.32350.78251.00510.9965
SGI 0.9051.57332.94540.48750.97541.30171.32660.76482.19750.4907
DEPI 0.93640.91891.10740.98950.81520.84230.94670.97010.97170.9904
SGAI 1.66070.89720.11282.38431.07051.85790.26371.45470.53981.7838
LVGI 1.04380.81711.24771.37461.05610.88650.73161.79490.96320.8524
TATA -0.20590.0596-0.1822-0.2025-0.1469-0.25770.02250.12340.0849-0.1408
M-score -4.05-1.47-0.49-2.93-3.78-0.28-2.54-2.400.66-3.34

InterDigital Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.48760.61392.75310.75760.72193.86111.11372.55887.87151.4539
GMI 1.0390.80030.94160.93370.90951.46921.44461.33691.09390.8128
AQI 1.16760.89391.00511.030.78441.05060.99650.97730.99111.1837
SGI 0.8782.03752.19752.19122.16220.48080.49070.52380.72591.3694
DEPI 0.96420.97080.97170.97210.96781.00670.99040.99991.01830.9567
SGAI -12.0451-1.24960.53980.49970.42661.95071.78381.80271.55380.8372
LVGI 1.2371.22240.96321.00310.76360.68840.85240.81141.00341.132
TATA 0.1283-0.02130.0849-0.0246-0.1614-0.0464-0.134-0.06390.0826-0.0372
M-score 0.71-1.850.66-1.70-2.42-0.32-3.31-1.683.94-1.95
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