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Liberty Interactive Corp (NAS:LINTA)
Beneish M-Score
-2.78 (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.

Liberty Interactive Corp has a M-score of -2.78 suggests that the company is not a manipulator.

LINTA' s 10-Year Beneish M-Score Range
Min: -3.3   Max: -2.25
Current: -2.78

-3.3
-2.25

During the past 9 years, the highest Beneish M-Score of Liberty Interactive Corp was -2.25. The lowest was -3.30. And the median was -2.66.


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 Liberty Interactive 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 * 0.9837+0.528 * 0.9072+0.404 * 0.9632+0.892 * 1.0877+0.115 * 0.8662
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1872+4.679 * -0.0526-0.327 * 1.0176
=-2.78

* 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 $1,040 Mil.
Revenue was 2728 + 3441 + 2500 + 2647 = $11,316 Mil.
Gross Profit was 1162 + 1350 + 1063 + 1126 = $4,701 Mil.
Total Current Assets was $4,529 Mil.
Total Assets was $24,662 Mil.
Property, Plant and Equipment(Net PPE) was $1,272 Mil.
Depreciation, Depletion and Amortization(DDA) was $945 Mil.
Selling, General & Admin. Expense(SGA) was $2,598 Mil.
Total Current Liabilities was $3,586 Mil.
Long-Term Debt was $6,608 Mil.
Net Income was 82 + 241 + 113 + 120 = $556 Mil.
Non Operating Income was -19 + 39 + 47 + -1 = $66 Mil.
Cash Flow from Operations was 526 + 609 + 305 + 346 = $1,786 Mil.
Accounts Receivable was $972 Mil.
Revenue was 2664 + 3179 + 2196 + 2365 = $10,404 Mil.
Gross Profit was 1111 + 1144 + 789 + 877 = $3,921 Mil.
Total Current Assets was $4,033 Mil.
Total Assets was $25,354 Mil.
Property, Plant and Equipment(Net PPE) was $1,189 Mil.
Depreciation, Depletion and Amortization(DDA) was $696 Mil.
Selling, General & Admin. Expense(SGA) was $2,012 Mil.
Total Current Liabilities was $3,706 Mil.
Long-Term Debt was $6,593 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)
=(1040 / 11316) / (972 / 10404)
=0.09190527 / 0.09342561
=0.9837

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)
=(1350 / 10404) / (1162 / 11316)
=0.37687428 / 0.41542948
=0.9072

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 - (4529 + 1272) / 24662) / (1 - (4033 + 1189) / 25354)
=0.76477982 / 0.79403644
=0.9632

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
=11316 / 10404
=1.0877

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))
=(696 / (696 + 1189)) / (945 / (945 + 1272))
=0.36923077 / 0.42625169
=0.8662

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)
=(2598 / 11316) / (2012 / 10404)
=0.22958643 / 0.19338716
=1.1872

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)
=((6608 + 3586) / 24662) / ((6593 + 3706) / 25354)
=0.41334847 / 0.40620809
=1.0176

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
=(556 - 66 - 1786) / 24662
=-0.0526

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.

Liberty Interactive Corp has a M-score of -2.78 suggests that the company will not 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.

Liberty Interactive Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03840.65831.10621.08980.9478
GMI 0.97520.74020.9921.0010.8804
AQI 0.99240.99811.0140.99731.0231
SGI 1.0281.07551.07661.04551.1192
DEPI 0.97350.99930.98211.09410.767
SGAI 1.02282.34421.03691.02341.2342
LVGI 0.94430.91441.11170.84221.0072
TATA -0.05030.0127-0.0127-0.0461-0.0333
M-score -2.66-3.01-2.42-2.51-2.70

Liberty Interactive Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.10621.06750.98181.03871.08981.24371.26711.21530.94780.9837
GMI 0.9921.04631.10821.161.0010.96890.93220.89890.88040.9072
AQI 1.0141.01731.02320.95130.99731.02891.00751.08281.02310.9632
SGI 1.07661.07781.06841.05641.04551.06481.08041.10411.11921.0877
DEPI 0.98211.01041.02411.03981.09410.9640.87780.81620.7670.8662
SGAI 1.03690.91380.82380.75771.02341.07671.12951.18841.23421.1872
LVGI 1.11171.05731.09051.09280.84220.82870.78220.73891.00721.0176
TATA -0.0127-0.0299-0.0427-0.0371-0.0461-0.0366-0.0327-0.0368-0.0333-0.0526
M-score -2.42-2.46-2.57-2.49-2.51-2.34-2.31-2.35-2.70-2.78
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