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InterOil Corp (NYSE:IOC)
Beneish M-Score
21.02 (As of Today)

Warning Sign:

Beneish M-Score 21.02 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 signals that the company is a manipulator.

IOC' s 10-Year Beneish M-Score Range
Min: -10.92   Max: 559.41
Current: 21.02

-10.92
559.41

During the past 13 years, the highest Beneish M-Score of InterOil Corp was 559.41. The lowest was -10.92. And the median was -1.33.


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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $586.55 Mil.
Revenue was -13.643 + 13.215 + -13.182 + 10.749 = $-2.86 Mil.
Gross Profit was -13.643 + 13.215 + -13.182 + 10.749 = $-2.86 Mil.
Total Current Assets was $790.14 Mil.
Total Assets was $1,302.41 Mil.
Property, Plant and Equipment(Net PPE) was $482.24 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.53 Mil.
Selling, General & Admin. Expense(SGA) was $43.56 Mil.
Total Current Liabilities was $227.23 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -32.531 + -21.869 + -64.206 + -16.931 = $-135.54 Mil.
Non Operating Income was -1.099 + -5.98 + -36.232 + -0.535 = $-43.85 Mil.
Cash Flow from Operations was -11.072 + -33.353 + -20.301 + -50.621 = $-115.35 Mil.
Accounts Receivable was $16.98 Mil.
Revenue was 13.689 + 1.903 + 0.712 + 0.617 = $16.92 Mil.
Gross Profit was 13.689 + 1.903 + 0.712 + 0.617 = $16.92 Mil.
Total Current Assets was $595.81 Mil.
Total Assets was $1,400.60 Mil.
Property, Plant and Equipment(Net PPE) was $179.24 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.91 Mil.
Selling, General & Admin. Expense(SGA) was $39.77 Mil.
Total Current Liabilities was $92.61 Mil.
Long-Term Debt was $64.55 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)
=(586.546 / -2.861) / (16.983 / 16.921)
= / 1.00366409
=

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)
=(13.215 / 16.921) / (-13.643 / -2.861)
=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 - (790.138 + 482.244) / 1302.407) / (1 - (595.813 + 179.236) / 1400.601)
=0.02305347 / 0.44663112
=

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
=-2.861 / 16.921
=

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))
=(22.905 / (22.905 + 179.236)) / (1.532 / (1.532 + 482.244))
=0.113312 / 0.00316675
=

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)
=(43.557 / -2.861) / (39.772 / 16.921)
= / 2.3504521
=

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 + 227.233) / 1302.407) / ((64.554 + 92.607) / 1400.601)
=0.17447157 / 0.11220969
=

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
=(-135.537 - -43.846 - -115.347) / 1302.407
=0.0182

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 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 0.12431.26190.76830.46551.89350.68771.6891.1930.5758588.059
GMI -16.04710.91920.46172.03850.25741.00581.49161.49120.58490.1004
AQI 0.79522.3350.48020.93978.40380.75891.16881.53171.32940.2601
SGI 6.84461.07141.21691.4590.75351.16441.38661.18021.06030.0094
DEPI 0.13991.05251.00181.051.10121.2170.90131.15321.0110.782
SGAI 0.23421.25951.52610.63971.31370.9730.99870.59010.996116.2078
LVGI 0.98261.13240.96890.96230.47670.83831.0971.16431.02020.5263
TATA 0.0161-0.0348-0.0023-0.0653-0.0223-0.0036-0.06330.0255-0.05840.0464
M-score -7.04-1.92-3.08-2.260.75-2.65-1.51-1.51-3.18516.49

InterOil Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 68.360365.250852.93890.01812.45980.15053.2007148.04741.45823.8243
GMI 0.19110.09060.14389.3420.40610.40610.40610.10711
AQI 1.51351.36281.81571.32944.96665.69360.45360.26010.05850.0516
SGI 0.0186-0.2281-0.480133.81530.17970.74861.19680.03736.0229-0.1691
DEPI 1.21921.03281.01281.01080.41280.23110.40690.78213.741735.7817
SGAI 30.500527.248828.83980.04579.15732.42681.818942.03630.22710.857
LVGI 1.4791.03230.96411.02020.90740.32770.32520.52630.51681.5549
TATA -0.00960.02870.0089-0.0814-0.0447-0.05110.00190.05670.07250.0182
M-score 53.1550.8139.1330.20-2.23-2.26-0.79124.512.9921.02
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