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InterDigital Inc (NAS:IDCC)
Beneish M-Score
-3.31 (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 -3.31 suggests that the company is not a manipulator.

IDCC' s 10-Year Beneish M-Score Range
Min: -4.03   Max: 2.89
Current: -3.31

-4.03
2.89

During the past 13 years, the highest Beneish M-Score of InterDigital Inc was 2.89. The lowest was -4.03. And the median was -2.70.


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 * 1.1137+0.528 * 1.4446+0.404 * 0.9965+0.892 * 0.4907+0.115 * 0.9904
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7838+4.679 * -0.134-0.327 * 0.8524
=-3.31

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $92.8 Mil.
Revenue was 99.683 + 110.623 + 67.692 + 47.363 = $325.4 Mil.
Gross Profit was 63.471 + 73.837 + 34.528 + 10.488 = $182.3 Mil.
Total Current Assets was $857.5 Mil.
Total Assets was $1,113.2 Mil.
Property, Plant and Equipment(Net PPE) was $9.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.4 Mil.
Selling, General & Admin. Expense(SGA) was $32.7 Mil.
Total Current Liabilities was $126.4 Mil.
Long-Term Debt was $208.8 Mil.
Net Income was 14.536 + 26.66 + 9.238 + -12.269 = $38.2 Mil.
Non Operating Income was -25.206 + 0.95 + 2.899 + -9.48 = $-30.8 Mil.
Cash Flow from Operations was -0.545 + -1.03 + 143.512 + 76.238 = $218.2 Mil.
Accounts Receivable was $169.9 Mil.
Revenue was 87.877 + 434.01 + 71.871 + 69.305 = $663.1 Mil.
Gross Profit was 56.572 + 388.459 + 45.671 + 46.077 = $536.8 Mil.
Total Current Assets was $814.3 Mil.
Total Assets was $1,056.6 Mil.
Property, Plant and Equipment(Net PPE) was $7.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.2 Mil.
Selling, General & Admin. Expense(SGA) was $37.4 Mil.
Total Current Liabilities was $172.9 Mil.
Long-Term Debt was $200.4 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)
=(92.83 / 325.361) / (169.874 / 663.063)
=0.28531385 / 0.25619587
=1.1137

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)
=(73.837 / 663.063) / (63.471 / 325.361)
=0.80954449 / 0.56037448
=1.4446

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 - (857.514 + 9.535) / 1113.183) / (1 - (814.347 + 7.824) / 1056.609)
=0.2211083 / 0.22187772
=0.9965

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
=325.361 / 663.063
=0.4907

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))
=(26.248 / (26.248 + 7.824)) / (33.385 / (33.385 + 9.535))
=0.77036863 / 0.7778425
=0.9904

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)
=(32.694 / 325.361) / (37.351 / 663.063)
=0.10048531 / 0.056331
=1.7838

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)
=((208.813 + 126.438) / 1113.183) / ((200.391 + 172.913) / 1056.609)
=0.30116432 / 0.35330382
=0.8524

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
=(38.165 - -30.837 - 218.175) / 1113.183
=-0.134

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 -3.31 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.33911.06932.29172.03610.26554.82580.11911.09172.75311.1137
GMI 111.11891.25620.98530.89010.95371.1160.94161.4446
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 1.66070.89720.11282.38431.07050.5690.8611.45470.53981.7838
LVGI 1.04380.81711.24771.37461.05610.88650.73161.79490.96320.8524
TATA -0.20590.0596-0.1822-0.2025-0.1469-0.25670.01960.12340.099-0.1408
M-score -4.05-1.47-0.49-2.93-3.78-0.02-2.70-2.400.72-3.34

InterDigital Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.14311.09171.67611.48760.61392.75310.75760.72193.86111.1137
GMI 0.91321.1161.1511.17750.97250.94160.93370.90951.46921.4446
AQI 0.78940.78250.89741.16760.89391.00511.030.78441.05060.9965
SGI 0.85190.76480.820.8782.03752.19752.19122.16220.48080.4907
DEPI 0.95050.97010.96090.96420.97080.97170.97210.96781.00670.9904
SGAI -2.68341.45471.40431.41930.5610.53980.49970.42661.95071.7838
LVGI 1.42551.79491.88651.2371.22240.96321.00310.76360.68840.8524
TATA 0.15910.12340.14260.1369-0.01470.106-0.0063-0.1485-0.0332-0.134
M-score -1.38-2.40-1.68-1.49-2.040.76-1.61-2.36-0.26-3.31
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