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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.
During the past 13 years, the highest Beneish M-Score of International Shipholding Corp was 7476.90. The lowest was -5.22. And the median was -2.70.
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 International Shipholding 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 * 0.7168||+||0.528 * 1.233||+||0.404 * 1.0582||+||0.892 * 0.9093||+||0.115 * 0.9581|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0404||+||4.679 * -0.1249||-||0.327 * 1.0267|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $25.9 Mil.|
Revenue was 66.509 + 67.308 + 68.026 + 70.978 = $272.8 Mil.
Gross Profit was 13.94 + 13.499 + 15.815 + 18.623 = $61.9 Mil.
Total Current Assets was $59.2 Mil.
Total Assets was $554.5 Mil.
Property, Plant and Equipment(Net PPE) was $394.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.7 Mil.
Selling, General & Admin. Expense(SGA) was $20.4 Mil.
Total Current Liabilities was $259.2 Mil.
Long-Term Debt was $4.1 Mil.
Net Income was -7.207 + -0.167 + -4.501 + -48.253 = $-60.1 Mil.
Non Operating Income was 0.468 + 0 + -2.498 + 0.751 = $-1.3 Mil.
Cash Flow from Operations was 5.308 + -5.138 + 1.905 + 8.326 = $10.4 Mil.
|Accounts Receivable was $39.8 Mil.
Revenue was 74.41 + 76.752 + 72.694 + 76.169 = $300.0 Mil.
Gross Profit was 18.96 + 18.95 + 15.261 + 30.73 = $83.9 Mil.
Total Current Assets was $88.8 Mil.
Total Assets was $686.1 Mil.
Property, Plant and Equipment(Net PPE) was $479.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $31.1 Mil.
Selling, General & Admin. Expense(SGA) was $21.6 Mil.
Total Current Liabilities was $78.2 Mil.
Long-Term Debt was $239.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(25.91 / 272.821)||/||(39.751 / 300.025)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(13.499 / 300.025)||/||(13.94 / 272.821)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (59.172 + 394.368) / 554.456)||/||(1 - (88.798 + 479.252) / 686.055)|
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.
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))|
|=||(31.054 / (31.054 + 479.252))||/||(26.746 / (26.746 + 394.368))|
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)|
|=||(20.443 / 272.821)||/||(21.609 / 300.025)|
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)|
|=||((4.08 + 259.186) / 554.456)||/||((239.028 + 78.248) / 686.055)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-60.128 - -1.279||-||10.401)||/||554.456|
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.
International Shipholding Corp has a M-score of -3.28 suggests that the company will not be a manipulator.
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
International Shipholding Corp Annual Data
International Shipholding Corp Quarterly Data