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

Warning Sign:

Beneish M-Score 1.34 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 1.34 signals that the company is a manipulator.

IOC' s Beneish M-Score Range Over the Past 10 Years
Min: -11.21   Max: 951.6
Current: 1.34

-11.21
951.6

During the past 13 years, the highest Beneish M-Score of InterOil Corp was 951.60. The lowest was -11.21. And the median was -0.42.


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 * 0.585+0.528 * 1+0.404 * 0.9369+0.892 * 1.7542+0.115 * 33.9336
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.4966+4.679 * -0.0277-0.327 * 1.5877
=1.34

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $559.48 Mil.
Revenue was 11.689 + 11.822 + -13.643 + 13.215 = $23.08 Mil.
Gross Profit was 11.689 + 11.822 + -13.643 + 13.215 = $23.08 Mil.
Total Current Assets was $660.43 Mil.
Total Assets was $1,191.40 Mil.
Property, Plant and Equipment(Net PPE) was $505.95 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.52 Mil.
Selling, General & Admin. Expense(SGA) was $46.47 Mil.
Total Current Liabilities was $304.13 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -83.83 + -103.725 + -32.531 + -21.869 = $-241.96 Mil.
Non Operating Income was -90.703 + -13.812 + 13.177 + -17.392 = $-108.73 Mil.
Cash Flow from Operations was -39.124 + -16.7 + -11.072 + -33.353 = $-100.25 Mil.
Accounts Receivable was $545.16 Mil.
Revenue was -13.182 + 10.749 + 13.689 + 1.903 = $13.16 Mil.
Gross Profit was -13.182 + 10.749 + 13.689 + 1.903 = $13.16 Mil.
Total Current Assets was $972.78 Mil.
Total Assets was $1,340.13 Mil.
Property, Plant and Equipment(Net PPE) was $337.31 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.27 Mil.
Selling, General & Admin. Expense(SGA) was $53.34 Mil.
Total Current Liabilities was $215.48 Mil.
Long-Term Debt was $0.00 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)
=(559.475 / 23.083) / (545.155 / 13.159)
=24.23753412 / 41.42830002
=0.585

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)
=(11.822 / 13.159) / (11.689 / 23.083)
=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 - (660.426 + 505.947) / 1191.395) / (1 - (972.783 + 337.305) / 1340.13)
=0.02100227 / 0.02241723
=0.9369

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
=23.083 / 13.159
=1.7542

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))
=(12.273 / (12.273 + 337.305)) / (0.524 / (0.524 + 505.947))
=0.03510804 / 0.00103461
=33.9336

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)
=(46.465 / 23.083) / (53.335 / 13.159)
=2.01295326 / 4.05311954
=0.4966

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 + 304.134) / 1191.395) / ((0 + 215.477) / 1340.13)
=0.25527554 / 0.16078813
=1.5877

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
=(-241.955 - -108.73 - -100.249) / 1191.395
=-0.0277

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 1.34 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.26190.76830.46551.89351.1616151.14632.30371.160.585
GMI 0.91920.46172.1060.24971.49670.0876111
AQI 2.3350.48020.93978.40380.8871.53171.32940.26010.9369
SGI 1.07141.21691.4590.75351.61450.00930.2654.76431.7542
DEPI 1.05251.00181.051.10121.09831.15221.01060.78233.8074
SGAI 1.25951.52610.63971.31370.663552.03484.9740.38650.4966
LVGI 1.13240.96890.96230.47670.91961.16431.18820.45191.5877
TATA -0.08250.0044-0.0447-0.0603-0.03860.0352-0.08580.0479-0.0277
M-score -2.15-3.05-2.130.56-1.65125.85-2.951.211.32

InterOil Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 52.93890.01812.45980.15053.2007148.04741.45823.82431.12050.585
GMI 0.14389.3420.40610.40610.40610.1071111
AQI 1.81571.32944.96665.69360.45360.26010.05850.05160.68290.9369
SGI -0.480133.81530.17970.74861.19680.03736.0229-0.1691-0.06611.7542
DEPI 1.01281.01080.41280.23110.40690.78213.741735.781741.615533.9336
SGAI 28.83980.04579.15732.42681.818942.03630.22710.8571.14340.4966
LVGI 0.96411.18820.90740.32770.32520.45190.51681.55491.8861.5877
TATA 0.0088-0.0813-0.0447-0.04510.01690.04790.07220.0004-0.0962-0.0277
M-score 39.1330.15-2.23-2.23-0.72124.492.9920.940.461.34
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