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InterOil Corp (NYSE:IOC)
Beneish M-Score
-1.92 (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 -1.92 signals that the company is a manipulator.

IOC' s 10-Year Beneish M-Score Range
Min: -10.91   Max: 559.41
Current: -1.92

-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 -1.92.


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 * 0.433+0.528 * 0.3134+0.404 * 4.9666+0.892 * 1.0211+0.115 * 0.4128
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2101+4.679 * -0.0226-0.327 * 0.9074
=-1.92

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $67 Mil.
Revenue was 311.079 + 398.903 + 305.235 + 345.66 = $1,361 Mil.
Gross Profit was 40.365 + 48.631 + 31.052 + 66.029 = $186 Mil.
Total Current Assets was $718 Mil.
Total Assets was $1,737 Mil.
Property, Plant and Equipment(Net PPE) was $342 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $56 Mil.
Total Current Liabilities was $423 Mil.
Long-Term Debt was $117 Mil.
Net Income was 318.636 + -24.813 + -6.318 + -13.23 = $274 Mil.
Non Operating Income was 327.162 + -12.857 + -7.172 + -8.451 = $299 Mil.
Cash Flow from Operations was -15.244 + 61.143 + 26.14 + -57.224 = $15 Mil.
Accounts Receivable was $151 Mil.
Revenue was 350.331 + 356.439 + 326.865 + 299.104 = $1,333 Mil.
Gross Profit was 35.572 + 40.21 + 40.535 + -59.206 = $57 Mil.
Total Current Assets was $463 Mil.
Total Assets was $1,369 Mil.
Property, Plant and Equipment(Net PPE) was $798 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $46 Mil.
Total Current Liabilities was $321 Mil.
Long-Term Debt was $147 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)
=(66.635 / 1360.877) / (150.719 / 1332.739)
=0.04896475 / 0.11308966
=0.433

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)
=(48.631 / 1332.739) / (40.365 / 1360.877)
=0.04285235 / 0.13673315
=0.3134

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 - (717.982 + 342.393) / 1737.189) / (1 - (463.166 + 798.057) / 1368.581)
=0.38960297 / 0.07844475
=4.9666

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
=1360.877 / 1332.739
=1.0211

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))
=(21.461 / (21.461 + 798.057)) / (23.192 / (23.192 + 342.393))
=0.02618734 / 0.06343805
=0.4128

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)
=(56.449 / 1360.877) / (45.683 / 1332.739)
=0.04147987 / 0.03427753
=1.2101

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)
=((116.987 + 422.822) / 1737.189) / ((147.427 + 321.25) / 1368.581)
=0.31073706 / 0.3424547
=0.9074

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
=(274.275 - 298.682 - 14.815) / 1737.189
=-0.0226

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 -1.92 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 0.12431.26190.76830.80561.09411.39470.99360.5758
GMI -16.04710.91920.46172.03850.25741.50021.14110.7643
AQI 0.79522.3350.48020.93978.40380.8871.53171.3294
SGI 6.84461.07141.21691.4590.75351.61451.18021.0603
DEPI 0.13991.05251.00181.051.10121.09831.15221.0106
SGAI 0.23421.25951.52610.63971.31370.66350.85531.0064
LVGI 0.98261.13240.96890.96230.47670.91961.43110.9666
TATA 0.0161-0.0348-0.0023-0.0653-0.0223-0.03980.0348-0.0584
M-score -7.04-1.92-3.08-1.950.01-1.44-1.97-3.07

InterOil Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.53951.20280.79370.99120.99361.15951.05550.45450.57580.433
GMI 1.4131.8299104.12084.29891.98231.81160.00920.18930.34130.3134
AQI 1.16882.64932.52552.55181.53171.51351.36281.81571.32944.9666
SGI 1.82651.79121.59911.51171.18021.09831.14111.08291.06031.0211
DEPI 0.6480.68950.740.83021.1521.21921.03281.01281.01080.4128
SGAI 0.75120.54150.7440.74040.85541.07941.01111.00421.00621.2101
LVGI 1.0970.92531.3141.33971.43111.4791.03230.96410.96660.9074
TATA -0.03360.0137-0.0430.00140.0367-0.00940.03370.0257-0.0587-0.0226
M-score -1.15-0.3552.640.26-1.52-1.80-2.53-2.87-3.29-1.92
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