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GuruFocus has detected 6 Warning Signs with Mitcham Industries Inc $MIND.
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Mitcham Industries Inc (NAS:MIND)
Beneish M-Score
-6.33 (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 -6.33 suggests that the company is not a manipulator.

MIND' s Beneish M-Score Range Over the Past 10 Years
Min: -24.03   Max: 18.78
Current: -6.33

-24.03
18.78

During the past 13 years, the highest Beneish M-Score of Mitcham Industries Inc was 18.78. The lowest was -24.03. And the median was -2.89.


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 * 0.7661+0.528 * -0.6822+0.404 * 0.9859+0.892 * 0.7209+0.115 * 0.8469
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2729+4.679 * -0.519-0.327 * 1.0097
=-6.33

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

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $11.29 Mil.
Revenue was 8.057 + 8.663 + 11.731 + 11.442 = $39.89 Mil.
Gross Profit was -2.137 + -2.242 + -0.366 + -1.021 = $-5.77 Mil.
Total Current Assets was $30.51 Mil.
Total Assets was $104.34 Mil.
Property, Plant and Equipment(Net PPE) was $54.19 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.61 Mil.
Selling, General & Admin. Expense(SGA) was $20.53 Mil.
Total Current Liabilities was $13.66 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -7.33 + -9.526 + -6.443 + -26.838 = $-50.14 Mil.
Non Operating Income was 0.287 + -0.612 + 0.451 + -0.94 = $-0.81 Mil.
Cash Flow from Operations was 0.603 + 1.334 + 1.75 + 1.148 = $4.84 Mil.
Accounts Receivable was $20.45 Mil.
Revenue was 15.681 + 7.554 + 17.142 + 14.963 = $55.34 Mil.
Gross Profit was 1.723 + -2.609 + 4.576 + 1.767 = $5.46 Mil.
Total Current Assets was $45.55 Mil.
Total Assets was $153.43 Mil.
Property, Plant and Equipment(Net PPE) was $78.58 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.55 Mil.
Selling, General & Admin. Expense(SGA) was $22.37 Mil.
Total Current Liabilities was $10.71 Mil.
Long-Term Debt was $9.19 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)
=(11.292 / 39.893) / (20.448 / 55.34)
=0.28305718 / 0.36949765
=0.7661

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)
=(5.457 / 55.34) / (-5.766 / 39.893)
=0.0986086 / -0.14453664
=-0.6822

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 - (30.509 + 54.192) / 104.342) / (1 - (45.553 + 78.578) / 153.425)
=0.18823676 / 0.19093368
=0.9859

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
=39.893 / 55.34
=0.7209

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))
=(33.552 / (33.552 + 78.578)) / (29.606 / (29.606 + 54.192))
=0.29922411 / 0.35330199
=0.8469

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)
=(20.525 / 39.893) / (22.368 / 55.34)
=0.51450129 / 0.40419227
=1.2729

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 + 13.664) / 104.342) / ((9.191 + 10.708) / 153.425)
=0.13095398 / 0.12969855
=1.0097

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
=(-50.137 - -0.814 - 4.835) / 104.342
=-0.519

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 -6.33 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

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.44330.69381.1081.50640.89271.26930.69661.45021.02591.1609
GMI 1.12371.00730.95891.48730.880.72941.43221.02821.24285.43
AQI 1.03330.80860.9081.17830.82930.61971.06980.98182.12051.0792
SGI 1.4141.56250.87430.82581.29351.58110.92780.87990.90270.6232
DEPI 1.54231.10140.89230.93060.98551.15660.85331.16990.71620.8876
SGAI 1.11840.7521.1191.03660.86490.80611.13771.19351.16811.357
LVGI 1.61860.83360.95941.03111.19820.65710.38852.33541.09651.1955
TATA 0.0676-0.1883-0.0852-0.1191-0.1867-0.0596-0.1408-0.0812-0.1761-0.3971
M-score -1.47-3.11-2.97-2.42-3.37-2.13-3.07-3.00-2.88-2.29

Mitcham Industries Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.33141.28331.02591.14480.87391.1151.16091.05020.95420.7661
GMI 1.08771.0431.24281.42271.80223.27465.43-4.5423-4.28-0.6822
AQI 1.81121.77292.12051.97631.37411.42921.07921.14561.02950.9859
SGI 0.93740.9480.90270.82340.70140.60260.62320.62250.75950.7209
DEPI 1.09190.95890.71620.75160.75570.80270.88760.87450.86410.8469
SGAI 1.10311.08321.16811.21381.28841.51831.3571.45691.31441.2729
LVGI 4.01622.83331.09651.49040.70920.58641.19551.22391.02031.0097
TATA -0.1176-0.0828-0.1761-0.1603-0.197-0.2717-0.3971-0.4323-0.4704-0.519
M-score -3.40-2.94-2.88-2.86-3.19-2.60-2.29-7.83-7.79-6.33
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