Switch to:
InterOil Corp (NYSE:IOC)
Beneish M-Score
2.96 (As of Today)

Warning Sign:

Beneish M-Score 2.96 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.

InterOil Corp has a M-score of 2.96 signals that the company is a manipulator.

IOC' s 10-Year Beneish M-Score Range
Min: -10.9   Max: 559.41
Current: 2.96

-10.9
559.41

During the past 13 years, the highest Beneish M-Score of InterOil Corp was 559.41. The lowest was -10.90. And the median was -1.51.


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 InterOil Corp 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 * 1.458+0.528 * 1+0.404 * 0.0585+0.892 * 6.0229+0.115 * 3.7417
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.2271+4.679 * 0.0666-0.327 * 0.5168
=2.96

* 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 $585.14 Mil.
Revenue was 13.215 + -13.182 + 10.749 + 13.689 = $24.47 Mil.
Gross Profit was 13.215 + -13.182 + 10.749 + 13.689 = $24.47 Mil.
Total Current Assets was $893.87 Mil.
Total Assets was $1,318.12 Mil.
Property, Plant and Equipment(Net PPE) was $394.22 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.80 Mil.
Selling, General & Admin. Expense(SGA) was $49.29 Mil.
Total Current Liabilities was $211.69 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -21.869 + -64.206 + -16.931 + 52.266 = $-50.74 Mil.
Non Operating Income was -5.98 + -36.232 + -0.535 + 3.504 = $-39.24 Mil.
Cash Flow from Operations was -33.353 + -20.301 + -50.621 + 4.96 = $-99.32 Mil.
Accounts Receivable was $66.64 Mil.
Revenue was 1.903 + 0.712 + 0.617 + 0.831 = $4.06 Mil.
Gross Profit was 1.903 + 0.712 + 0.617 + 0.831 = $4.06 Mil.
Total Current Assets was $717.98 Mil.
Total Assets was $1,737.19 Mil.
Property, Plant and Equipment(Net PPE) was $342.39 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.19 Mil.
Selling, General & Admin. Expense(SGA) was $36.04 Mil.
Total Current Liabilities was $422.82 Mil.
Long-Term Debt was $116.99 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)
=(585.141 / 24.471) / (66.635 / 4.063)
=23.91160966 / 16.40044302
=1.458

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)
=(-13.182 / 4.063) / (13.215 / 24.471)
=1 / 1
=1

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 - (893.873 + 394.218) / 1318.12) / (1 - (717.982 + 342.393) / 1737.189)
=0.02278169 / 0.38960297
=0.0585

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
=24.471 / 4.063
=6.0229

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))
=(23.192 / (23.192 + 342.393)) / (6.799 / (6.799 + 394.218))
=0.06343805 / 0.01695439
=3.7417

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)
=(49.294 / 24.471) / (36.036 / 4.063)
=2.01438437 / 8.86930839
=0.2271

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)
=((0 + 211.685) / 1318.12) / ((116.987 + 422.822) / 1737.189)
=0.16059615 / 0.31073706
=0.5168

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
=(-50.74 - -39.243 - -99.315) / 1318.12
=0.0666

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.

InterOil Corp has a M-score of 2.96 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.

InterOil Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.12431.26190.76830.46551.89351.1616151.14632.30371.16
GMI -16.04710.91920.46172.03850.25741.50020.087611
AQI 0.79522.3350.48020.93978.40380.8871.53171.32940.2601
SGI 6.84461.07141.21691.4590.75351.61450.00930.2654.7643
DEPI 0.13991.05251.00181.051.10121.09831.15221.01060.782
SGAI 0.23421.25951.52610.63971.31370.663552.03484.9740.3865
LVGI 0.98261.13240.96890.96230.47670.91961.16431.02020.5263
TATA 0.0161-0.0348-0.0023-0.0653-0.0223-0.03980.0352-0.08590.0464
M-score -7.04-1.92-3.08-2.260.75-1.66125.85-2.891.18

InterOil Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 151.131868.360365.250852.93890.01812.45980.15053.2007148.04741.458
GMI -0.028-0.0519-0.0008-0.0161-29.2098-1.4968-1.4968-1.49680.1071
AQI 1.53171.51351.36281.81571.32944.96665.69360.45360.26010.0585
SGI 0.00930.0186-0.2281-0.480133.81530.17970.74861.19680.03736.0229
DEPI 1.1521.21921.03281.01281.01080.41280.23110.40690.78213.7417
SGAI 52.048730.500527.248828.83980.04579.15732.42681.818942.03630.2271
LVGI 1.16431.4791.03230.96411.02020.90740.32770.32520.52630.5168
TATA 0.037-0.00910.02870.0089-0.0814-0.0447-0.0567-0.00390.05090.0666
M-score 125.7953.0250.7739.049.85-3.23-3.29-1.83124.482.96
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK