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GuruFocus has detected 2 Warning Signs with Mitcham Industries Inc $MIND.
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Mitcham Industries Inc (NAS:MIND)
Beneish M-Score
-5.11 (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.

Mitcham Industries Inc has a M-score of -5.11 suggests that the company is not a manipulator.

MIND' s Beneish M-Score Range Over the Past 10 Years
Min: -5.11   Max: 18.78
Current: -5.11

-5.11
18.78

During the past 13 years, the highest Beneish M-Score of Mitcham Industries Inc was 18.78. The lowest was -5.11. And the median was -2.93.


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 Mitcham Industries Inc 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 * 0.911+0.528 * -0.2848+0.404 * 1.2258+0.892 * 0.7912+0.115 * 0.7753
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2411+4.679 * -0.3896-0.327 * 0.6446
=-5.11

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $15.83 Mil.
Revenue was 12.548 + 8.057 + 8.663 + 11.731 = $41.00 Mil.
Gross Profit was -2.669 + -2.137 + -2.242 + -0.366 = $-7.41 Mil.
Total Current Assets was $35.06 Mil.
Total Assets was $94.71 Mil.
Property, Plant and Equipment(Net PPE) was $43.84 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.28 Mil.
Selling, General & Admin. Expense(SGA) was $20.73 Mil.
Total Current Liabilities was $13.47 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -9.854 + -7.33 + -9.526 + -6.443 = $-33.15 Mil.
Non Operating Income was 0.468 + 0.287 + -0.612 + 0.451 = $0.59 Mil.
Cash Flow from Operations was -0.533 + 0.603 + 1.334 + 1.75 = $3.15 Mil.
Accounts Receivable was $21.96 Mil.
Revenue was 11.442 + 15.681 + 7.554 + 17.142 = $51.82 Mil.
Gross Profit was -1.021 + 1.723 + -2.609 + 4.576 = $2.67 Mil.
Total Current Assets was $42.88 Mil.
Total Assets was $134.76 Mil.
Property, Plant and Equipment(Net PPE) was $73.52 Mil.
Depreciation, Depletion and Amortization(DDA) was $32.11 Mil.
Selling, General & Admin. Expense(SGA) was $21.11 Mil.
Total Current Liabilities was $12.46 Mil.
Long-Term Debt was $17.27 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)
=(15.83 / 40.999) / (21.963 / 51.819)
=0.38610698 / 0.42384068
=0.911

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)
=(2.669 / 51.819) / (-7.414 / 40.999)
=0.0515062 / -0.18083368
=-0.2848

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 - (35.059 + 43.838) / 94.714) / (1 - (42.884 + 73.516) / 134.759)
=0.16699749 / 0.1362358
=1.2258

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
=40.999 / 51.819
=0.7912

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))
=(32.111 / (32.111 + 73.516)) / (28.275 / (28.275 + 43.838))
=0.30400371 / 0.39209297
=0.7753

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)
=(20.727 / 40.999) / (21.108 / 51.819)
=0.50554892 / 0.40734094
=1.2411

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 + 13.465) / 94.714) / ((17.266 + 12.456) / 134.759)
=0.14216483 / 0.2205567
=0.6446

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
=(-33.153 - 0.594 - 3.154) / 94.714
=-0.3896

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.

Mitcham Industries Inc has a M-score of -5.11 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 local exchange's currency.

Mitcham Industries Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 0.69381.1081.50640.89271.26930.69661.45021.02591.28940.911
GMI 1.00730.95891.48730.880.72941.43221.02821.24285.43-0.2848
AQI 0.80860.9081.17830.82930.61971.06980.98182.12050.96431.2258
SGI 1.56250.87430.82581.29351.58110.92780.87990.90270.62320.7912
DEPI 1.10140.89230.93060.98551.15660.85331.16990.71620.88760.7753
SGAI 0.7521.1191.03660.86490.80611.13771.19351.16811.3571.2411
LVGI 0.83360.95941.03111.19820.65710.38852.33541.09651.19550.6446
TATA -0.1883-0.0852-0.1191-0.1867-0.0596-0.1408-0.0812-0.1761-0.3971-0.3896
M-score -3.11-2.97-2.42-3.37-2.13-3.07-3.00-2.88-2.22-5.11

Mitcham Industries Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.28331.02591.14480.87391.1151.28941.05020.95420.76610.911
GMI 1.0431.24281.42271.80223.27465.43-4.5423-4.28-0.6822-0.2848
AQI 1.77292.12051.97631.37411.42920.96431.14561.02950.98591.2258
SGI 0.9480.90270.82340.70140.60260.62320.62250.75950.72090.7912
DEPI 0.95890.71620.75160.75570.80270.88760.87450.86410.84690.7753
SGAI 1.08321.16811.21381.28841.51831.3571.45691.31441.27291.2411
LVGI 2.83331.09651.49040.70920.58641.19551.22391.02031.00970.6446
TATA -0.0828-0.1761-0.1603-0.197-0.2717-0.3971-0.4323-0.4704-0.519-0.3896
M-score -2.94-2.88-2.86-3.19-2.60-2.22-7.83-7.79-6.33-5.11
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