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Novagold Resources Inc (AMEX:NG)
Beneish M-Score
3.38 (As of Today)

Warning Sign:

Beneish M-Score 3.38 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Novagold Resources Inc has a M-score of signals that the company is a manipulator.

NG' s Beneish M-Score Range Over the Past 10 Years
Min: -7.02   Max: 7.73
Current: 3.38

-7.02
7.73

During the past 13 years, the highest Beneish M-Score of Novagold Resources Inc was 7.73. The lowest was -7.02. And the median was -0.62.


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 Novagold Resources 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $2.73 Mil.
Revenue was 0 + 0 + 0 + 0 = $0.00 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.00 Mil.
Total Current Assets was $130.04 Mil.
Total Assets was $433.58 Mil.
Property, Plant and Equipment(Net PPE) was $43.70 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.04 Mil.
Selling, General & Admin. Expense(SGA) was $19.89 Mil.
Total Current Liabilities was $3.52 Mil.
Long-Term Debt was $80.26 Mil.
Net Income was -7.168 + -6.301 + -9.184 + -9.299 = $-31.95 Mil.
Non Operating Income was 0.415 + 1.141 + -0.673 + 3.462 = $4.35 Mil.
Cash Flow from Operations was -1.513 + -1.755 + -2.536 + -5.622 = $-11.43 Mil.
Accounts Receivable was $ Mil.
Revenue was 0 + 0 + 0 + 0 = $ Mil.
Gross Profit was + + + = $ Mil.
Total Current Assets was $ Mil.
Total Assets was $ Mil.
Property, Plant and Equipment(Net PPE) was $ Mil.
Depreciation, Depletion and Amortization(DDA) was $ Mil.
Selling, General & Admin. Expense(SGA) was $ Mil.
Total Current Liabilities was $ Mil.
Long-Term Debt was $ 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)
=(2.729 / 0) / ( / 0)
= /
=

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)
=(0 / 0) / (0 / 0)
= /
=

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 - (130.041 + 43.695) / 433.584) / (1 - ( + 51.027) / )
=0.59930256 /
=

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
=0 / 0
=

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))
=(0.036 / (0.036 + 51.027)) / (0.035 / (0.035 + 43.695))
= / 0.00080037
=

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)
=(19.887 / 0) / ( / 0)
= /
=

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)
=((80.261 + 3.517) / 433.584) / (( + ) / )
=0.19322207 /
=

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
=(-31.952 - 4.345 - -11.426) / 433.584
=-0.0574

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.

Novagold Resources Inc has a M-score of 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.

Novagold Resources Inc Annual Data

Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14Nov15
DSRI 0.63534.00310.31761.50562.193511111
GMI 0.90650.9981.00681.2471-0.012211111
AQI 2.05681.95320.64130.89030.633828.506818.009118.990419.502620.137
SGI 2.3070.97240.50110.31880.520400000
DEPI 1.69481.82360.78181.07790.42840.00550.48741.26931.21451.0698
SGAI 1.52553.43290.210916.32230.578611111
LVGI 1.89291.52952.31770.69411.19571.61141.27410.74470.8740.9288
TATA -0.0470.01320.0072-0.0229-0.0062-0.1141-0.0542-0.0896-0.0657-0.0574
M-score -1.790.21-3.98-5.17-2.586.893.103.593.864.12

Novagold Resources Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 1111111111
GMI 1111111111
AQI 20.026417.670217.714918.099218.232518.146717.947918.84118.736618.737
SGI 0000000000
DEPI 0.00060.82880.79490.83460.8560.7930.74450.72780.70770.6985
SGAI 1111111111
LVGI 1.36821.32061.37941.40031.46121.551.67171.48251.58491.6471
TATA -0.6816-0.0896-0.0851-0.0868-0.0797-0.0657-0.0695-0.0656-0.058-0.0574
M-score 0.892.822.832.983.053.042.903.343.303.28
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