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InterOil Corp (NYSE:IOC)
Beneish M-Score
-1.68 (As of Today)

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 -1.68 signals that the company is a manipulator.

IOC' s 10-Year Beneish M-Score Range
Min: -10.91   Max: 559.41
Current: -1.68

-10.91
559.41

During the past 13 years, the highest Beneish M-Score of InterOil Corp was 559.41. The lowest was -10.91. And the median was -2.00.


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 * 0.1148+0.528 * 0.6942+0.404 * 5.5932+0.892 * 0.9946+0.115 * 0.2522
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2412+4.679 * -0.0342-0.327 * 0.3493
=-1.68

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $17 Mil.
Revenue was 13.689 + 311.079 + 398.903 + 305.235 = $1,029 Mil.
Gross Profit was 13.689 + 40.365 + 48.631 + 31.052 = $134 Mil.
Total Current Assets was $596 Mil.
Total Assets was $1,401 Mil.
Property, Plant and Equipment(Net PPE) was $179 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $55 Mil.
Total Current Liabilities was $93 Mil.
Long-Term Debt was $65 Mil.
Net Income was 52.266 + 318.636 + -24.813 + -6.318 = $340 Mil.
Non Operating Income was 3.504 + 327.162 + -12.857 + -7.172 = $311 Mil.
Cash Flow from Operations was 4.96 + -15.244 + 61.143 + 26.14 = $77 Mil.
Accounts Receivable was $149 Mil.
Revenue was 0.831 + 350.331 + 356.439 + 326.865 = $1,034 Mil.
Gross Profit was 0.831 + 35.572 + 16.41 + 40.535 = $93 Mil.
Total Current Assets was $410 Mil.
Total Assets was $1,308 Mil.
Property, Plant and Equipment(Net PPE) was $794 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $44 Mil.
Total Current Liabilities was $280 Mil.
Long-Term Debt was $141 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)
=(16.983 / 1028.906) / (148.761 / 1034.466)
=0.01650588 / 0.14380463
=0.1148

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)
=(40.365 / 1034.466) / (13.689 / 1028.906)
=0.09023786 / 0.1299798
=0.6942

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 - (595.813 + 179.236) / 1400.601) / (1 - (409.843 + 793.775) / 1308.07)
=0.44663112 / 0.079852
=5.5932

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
=1028.906 / 1034.466
=0.9946

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))
=(23.35 / (23.35 + 793.775)) / (22.905 / (22.905 + 179.236))
=0.0285758 / 0.113312
=0.2522

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)
=(54.903 / 1028.906) / (44.473 / 1034.466)
=0.05336056 / 0.04299126
=1.2412

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)
=((64.554 + 92.607) / 1400.601) / ((140.527 + 279.714) / 1308.07)
=0.11220969 / 0.32126797
=0.3493

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
=(339.771 - 310.637 - 76.999) / 1400.601
=-0.0342

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 -1.68 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.12431.26190.76830.80561.09410.67432.03050.92050.6331
GMI -16.04710.91920.46172.03850.25741.00582.70330.82280.5849
AQI 0.79522.3350.48020.93978.40380.59331.7041.45311.2295
SGI 6.84461.07141.21691.4590.75351.16441.38661.18021.0603
DEPI 0.13991.05251.00181.051.10121.22730.89381.15961.0054
SGAI 0.23421.25951.52610.63971.31370.9730.99870.59010.996
LVGI 0.98261.13240.96890.96230.47450.9820.94821.42910.9606
TATA 0.0161-0.0348-0.0023-0.0653-0.0223-0.0036-0.04010.0256-0.0584
M-score -7.04-1.92-3.08-1.950.01-2.77-0.19-2.23-3.15

InterOil Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.54790.99781.16110.92051.15951.40730.6420.840.57990.1148
GMI 2.903215.02252.87710.9760.86820.09740.44250.5340.48140.6942
AQI 2.64932.52552.84121.45311.51351.36281.63071.22954.96665.5932
SGI 1.39181.2721.22471.18021.09830.85580.80790.79910.76240.9946
DEPI 0.92961.19951.06531.15961.22041.03421.01421.00540.41290.2522
SGAI 0.78370.9910.99230.59010.70520.8080.78171.17851.45421.2412
LVGI 0.92531.3141.35251.42911.4791.03230.9550.96060.90740.3493
TATA 0.0258-0.053-0.0150.0335-0.01260.03050.0303-0.064-0.0266-0.0342
M-score 0.225.45-0.57-2.12-2.25-2.39-2.82-3.28-1.99-1.68
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