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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.
During the past 13 years, the highest Beneish M-Score of InterDigital Inc was 3.92. The lowest was -4.66. And the median was -2.31.
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 * 0.3696||+||0.528 * 1.0589||+||0.404 * 1.0909||+||0.892 * 0.8492||+||0.115 * 0.9835|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2239||+||4.679 * -0.097||-||0.327 * 1.3846|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $108.7 Mil.|
Revenue was 118.551 + 110.378 + 86.121 + 77.622 = $392.7 Mil.
Gross Profit was 87.339 + 78.753 + 49.934 + 44.168 = $260.2 Mil.
Total Current Assets was $1,117.2 Mil.
Total Assets was $1,461.1 Mil.
Property, Plant and Equipment(Net PPE) was $11.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.3 Mil.
Selling, General & Admin. Expense(SGA) was $36.5 Mil.
Total Current Liabilities was $398.4 Mil.
Long-Term Debt was $253.6 Mil.
Net Income was 32.602 + 29.065 + 13.79 + 13.512 = $89.0 Mil.
Non Operating Income was -0.076 + -0.188 + -4.699 + -3.167 = $-8.1 Mil.
Cash Flow from Operations was 25.295 + 1.771 + 55.984 + 155.748 = $238.8 Mil.
|Accounts Receivable was $346.3 Mil.
Revenue was 194.234 + 57.844 + 99.683 + 110.623 = $462.4 Mil.
Gross Profit was 162.962 + 24.15 + 63.471 + 73.837 = $324.4 Mil.
Total Current Assets was $1,117.1 Mil.
Total Assets was $1,423.3 Mil.
Property, Plant and Equipment(Net PPE) was $9.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.5 Mil.
Selling, General & Admin. Expense(SGA) was $35.1 Mil.
Total Current Liabilities was $245.4 Mil.
Long-Term Debt was $213.2 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)|
|=||(108.717 / 392.672)||/||(346.335 / 462.384)|
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)|
|=||(78.753 / 462.384)||/||(87.339 / 392.672)|
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 - (1117.194 + 11.479) / 1461.122)||/||(1 - (1117.091 + 9.369) / 1423.329)|
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))|
|=||(35.545 / (35.545 + 9.369))||/||(47.297 / (47.297 + 11.479))|
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)|
|=||(36.469 / 392.672)||/||(35.087 / 462.384)|
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)|
|=||((253.593 + 398.353) / 1461.122)||/||((213.247 + 245.423) / 1423.329)|
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|
|=||(88.969 - -8.13||-||238.798)||/||1461.122|
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 -3.75 suggests that the company will not 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