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

Warning Sign:

Beneish M-Score 0.48 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 Beneish M-Score Range Over the Past 10 Years
Min: -10.92   Max: 951.68
Current: 0.48

-10.92
951.68

During the past 13 years, the highest Beneish M-Score of InterOil Corp was 951.68. The lowest was -10.92. And the median was -1.32.


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 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 (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $602.82 Mil.
Revenue was 11.822 + -13.643 + 13.215 + -13.182 = $-1.79 Mil.
Gross Profit was 11.822 + -13.643 + 13.215 + -13.182 = $-1.79 Mil.
Total Current Assets was $731.96 Mil.
Total Assets was $1,231.92 Mil.
Property, Plant and Equipment(Net PPE) was $470.03 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.73 Mil.
Selling, General & Admin. Expense(SGA) was $36.74 Mil.
Total Current Liabilities was $258.76 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -103.725 + -32.531 + -21.869 + -64.206 = $-222.33 Mil.
Non Operating Income was -2.569 + -1.099 + -5.98 + -19.606 = $-29.25 Mil.
Cash Flow from Operations was -16.7 + -11.072 + -33.353 + -20.301 = $-81.43 Mil.
Accounts Receivable was $577.34 Mil.
Revenue was 10.749 + 13.689 + 1.903 + 0.712 = $27.05 Mil.
Gross Profit was 10.749 + 13.689 + 1.903 + 0.712 = $27.05 Mil.
Total Current Assets was $1,031.58 Mil.
Total Assets was $1,337.45 Mil.
Property, Plant and Equipment(Net PPE) was $258.28 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.77 Mil.
Selling, General & Admin. Expense(SGA) was $47.66 Mil.
Total Current Liabilities was $83.43 Mil.
Long-Term Debt was $65.52 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)
=(602.818 / -1.788) / (577.336 / 27.053)
= / 21.34092337
=

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)
=(-13.643 / 27.053) / (11.822 / -1.788)
=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 - (731.96 + 470.027) / 1231.923) / (1 - (1031.583 + 258.276) / 1337.452)
=0.02430022 / 0.03558483
=

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
=-1.788 / 27.053
=

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))
=(17.765 / (17.765 + 258.276)) / (0.728 / (0.728 + 470.027))
=0.06435638 / 0.00154645
=

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)
=(36.743 / -1.788) / (47.66 / 27.053)
= / 1.76172698
=

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 + 258.756) / 1231.923) / ((65.521 + 83.431) / 1337.452)
=0.21004235 / 0.11136998
=

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
=(-222.331 - -29.254 - -81.426) / 1231.923
=-0.0906

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 0.12431.26190.76830.46551.89350.68771.689151.14632.30371.16
GMI -16.04710.91920.46172.03850.25741.00581.49160.087611
AQI 0.79522.3350.48020.93978.40380.75891.16881.53171.32940.2601
SGI 6.84461.07141.21691.4590.75351.16441.38660.00930.2654.7643
DEPI 0.13991.05251.00181.051.10121.2170.90241.15221.01060.782
SGAI 0.23421.25951.52610.63971.31370.9730.681952.03484.9740.3865
LVGI 0.98261.13240.96890.96230.47670.83831.0971.16431.02020.5263
TATA 0.0161-0.0348-0.0023-0.0653-0.0223-0.0036-0.03980.0352-0.08590.0464
M-score -7.04-1.92-3.08-2.260.75-2.65-1.35125.85-2.891.18

InterOil Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 65.250852.93890.01812.45980.15053.2007148.04741.45823.82431.1205
GMI 0.09060.14389.3420.40610.40610.40610.107111
AQI 1.36281.81571.32944.96665.69360.45360.26010.05850.05160.6829
SGI -0.2281-0.480133.81530.17970.74861.19680.03736.0229-0.1691-0.0661
DEPI 1.03281.01281.01080.41280.23110.40690.78213.741735.781741.6155
SGAI 27.248828.83980.04579.15732.42681.818942.03630.22710.8571.1434
LVGI 1.03230.96411.02020.90740.32770.32520.52630.51681.55491.886
TATA 0.02870.0089-0.0814-0.0447-0.05110.0040.04640.0620.0075-0.0906
M-score 50.8139.1330.20-2.23-2.26-0.78124.462.9420.970.48
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