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InterDigital Inc (NAS:IDCC)
Beneish M-Score
-2.64 (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 -2.64 suggests that the company is not a manipulator.

IDCC' s 10-Year Beneish M-Score Range
Min: -4.66   Max: 3.94
Current: -2.64

-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 -2.32.


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 * 1.0704+0.528 * 0.8129+0.404 * 0.9555+0.892 * 1.3946+0.115 * 0.9854
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8607+4.679 * -0.0684-0.327 * 1.4884
=-2.64

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $103.1 Mil.
Revenue was 110.378 + 86.121 + 77.622 + 194.234 = $468.4 Mil.
Gross Profit was 78.753 + 49.934 + 44.168 + 163.365 = $336.2 Mil.
Total Current Assets was $1,117.1 Mil.
Total Assets was $1,457.8 Mil.
Property, Plant and Equipment(Net PPE) was $10.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $44.5 Mil.
Selling, General & Admin. Expense(SGA) was $38.1 Mil.
Total Current Liabilities was $385.7 Mil.
Long-Term Debt was $250.7 Mil.
Net Income was 29.065 + 13.79 + 13.512 + 78.901 = $135.3 Mil.
Non Operating Income was -0.188 + -4.699 + -3.167 + -3.602 = $-11.7 Mil.
Cash Flow from Operations was 1.771 + 55.984 + 155.748 + 33.14 = $246.6 Mil.
Accounts Receivable was $69.0 Mil.
Revenue was 57.844 + 99.683 + 110.623 + 67.692 = $335.8 Mil.
Gross Profit was 24.15 + 63.471 + 73.837 + 34.528 = $196.0 Mil.
Total Current Assets was $815.4 Mil.
Total Assets was $1,080.4 Mil.
Property, Plant and Equipment(Net PPE) was $9.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.8 Mil.
Selling, General & Admin. Expense(SGA) was $31.8 Mil.
Total Current Liabilities was $105.8 Mil.
Long-Term Debt was $211.0 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)
=(103.069 / 468.355) / (69.046 / 335.842)
=0.22006598 / 0.20559072
=1.0704

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)
=(49.934 / 335.842) / (78.753 / 468.355)
=0.58356608 / 0.71787426
=0.8129

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 - (1117.116 + 10.836) / 1457.773) / (1 - (815.446 + 9.098) / 1080.359)
=0.2262499 / 0.23678703
=0.9555

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
=468.355 / 335.842
=1.3946

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))
=(34.757 / (34.757 + 9.098)) / (44.535 / (44.535 + 10.836))
=0.79254361 / 0.80430189
=0.9854

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)
=(38.119 / 468.355) / (31.757 / 335.842)
=0.08138912 / 0.09455935
=0.8607

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)
=((250.674 + 385.664) / 1457.773) / ((210.992 + 105.846) / 1080.359)
=0.43651378 / 0.29327103
=1.4884

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
=(135.268 - -11.656 - 246.643) / 1457.773
=-0.0684

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 -2.64 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.06932.29172.03610.26554.82580.11911.09172.75311.11370.4358
GMI 11.11891.25620.98530.89010.95371.1160.94161.44460.8263
AQI 1.22530.43921.56481.36470.60161.32350.78251.00510.99651.2829
SGI 1.57332.94540.48750.97541.30171.32660.76482.19750.49071.278
DEPI 0.91891.10740.98950.81520.84230.94670.97010.97170.99041.0088
SGAI 0.89720.11282.38431.07050.5690.8611.45470.53981.70750.9439
LVGI 0.81711.24771.37461.05610.88650.73161.79490.96320.85241.1758
TATA 0.0596-0.1822-0.2025-0.1469-0.25670.01960.12340.099-0.1408-0.1023
M-score -1.47-0.49-2.93-3.78-0.02-2.70-2.400.72-3.33-3.25

InterDigital Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 2.75310.75760.72193.86111.11372.55887.87151.45390.43581.0704
GMI 0.94160.93370.90951.46921.44461.33961.09520.81390.82740.8129
AQI 1.00511.030.78441.05060.99650.97730.99111.18371.28290.9555
SGI 2.19752.19122.16220.48080.49070.52380.72591.36941.2781.3946
DEPI 0.97170.97210.96781.00670.99040.99991.01830.95671.00880.9854
SGAI 0.53980.49970.42661.95071.70751.68351.46130.78820.92270.8607
LVGI 0.96321.00310.76360.68840.85240.81141.00341.1321.17581.4884
TATA 0.106-0.0094-0.1512-0.0325-0.1436-0.07090.0773-0.046-0.1055-0.0684
M-score 0.76-1.63-2.37-0.26-3.34-1.693.93-1.98-3.26-2.64
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