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Beneish M-Score -0.71 higher than -2.22, which implies that it might have manipulated its financial results.
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 2.89. The lowest was -4.87. And the median was -2.61.
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 * 2.8117||+||0.528 * 0.8768||+||0.404 * 0.9342||+||0.892 * 1.5084||+||0.115 * 0.9882|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7711||+||4.679 * -0.0697||-||0.327 * 0.9024|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $228.5 Mil.|
Revenue was 273.868 + 208.307 + 75.915 + 107.764 = $665.9 Mil.
Gross Profit was 241.925 + 182.158 + 47.63 + 80.597 = $552.3 Mil.
Total Current Assets was $1,221.1 Mil.
Total Assets was $1,727.9 Mil.
Property, Plant and Equipment(Net PPE) was $12.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.8 Mil.
Selling, General & Admin. Expense(SGA) was $46.3 Mil.
Total Current Liabilities was $425.5 Mil.
Long-Term Debt was $272.0 Mil.
Net Income was 136.47 + 104.466 + 39.994 + 28.071 = $309.0 Mil.
Non Operating Income was -0.229 + -0.385 + -0.706 + -0.112 = $-1.4 Mil.
Cash Flow from Operations was 233.282 + -10.171 + 191.434 + 16.233 = $430.8 Mil.
|Accounts Receivable was $53.9 Mil.
Revenue was 112.098 + 100.408 + 118.551 + 110.378 = $441.4 Mil.
Gross Profit was 82.897 + 72.045 + 87.339 + 78.753 = $321.0 Mil.
Total Current Assets was $1,011.0 Mil.
Total Assets was $1,474.5 Mil.
Property, Plant and Equipment(Net PPE) was $12.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.8 Mil.
Selling, General & Admin. Expense(SGA) was $39.8 Mil.
Total Current Liabilities was $400.0 Mil.
Long-Term Debt was $259.6 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)|
|=||(228.464 / 665.854)||/||(53.868 / 441.435)|
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)|
|=||(321.034 / 441.435)||/||(552.31 / 665.854)|
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 - (1221.119 + 12.626) / 1727.853)||/||(1 - (1010.967 + 12.148) / 1474.485)|
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))|
|=||(47.793 / (47.793 + 12.148))||/||(52.753 / (52.753 + 12.626))|
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)|
|=||(46.271 / 665.854)||/||(39.783 / 441.435)|
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)|
|=||((272.021 + 425.48) / 1727.853)||/||((259.595 + 399.973) / 1474.485)|
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|
|=||(309.001 - -1.432||-||430.778)||/||1727.853|
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 -0.71 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