Switch to:
Novagold Resources Inc (AMEX:NG)
Beneish M-Score
3.64 (As of Today)

Warning Sign:

Beneish M-Score 3.64 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: -16.3   Max: 10.93
Current: 3.64

-16.3
10.93

During the past 13 years, the highest Beneish M-Score of Novagold Resources Inc was 10.93. The lowest was -16.30. And the median was -0.09.


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 (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 0 + 0 + 0 + 0 = $0.00 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.00 Mil.
Total Current Assets was $114.17 Mil.
Total Assets was $424.14 Mil.
Property, Plant and Equipment(Net PPE) was $44.41 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.03 Mil.
Selling, General & Admin. Expense(SGA) was $20.12 Mil.
Total Current Liabilities was $1.98 Mil.
Long-Term Debt was $82.51 Mil.
Net Income was -9.138 + -9.977 + -7.168 + -6.301 = $-32.58 Mil.
Non Operating Income was -0.797 + 0.525 + 0.415 + 1.141 = $1.28 Mil.
Cash Flow from Operations was -2.148 + -7.736 + -1.513 + -1.755 = $-13.15 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)
=(0 / 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)
= /
=

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 - (114.166 + 44.414) / 424.135) / (1 - ( + 46.83) / )
=0.62610961 /
=

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 + 46.83)) / (0.034 / (0.034 + 44.414))
= / 0.00076494
=

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)
=(20.12 / 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)
=((82.505 + 1.981) / 424.135) / (( + ) / )
=0.19919601 /
=

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
=(-32.584 - 1.284 - -13.152) / 424.135
=-0.0488

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 0.63534.00310.31831.1161.524240.33731111
GMI 0.90650.998-0.0948-12.32431.4711-0.00371111
AQI 2.05681.95320.64130.890314.33061.26080.63170.66620.68410.7064
SGI 2.3070.97240.49990.43010.38660.65990000
DEPI 1.69481.82360.78521.07320.02090.061950.3689419.6131401.493353.6597
SGAI 1.52553.43290.47741.90175.16280.93291111
LVGI 1.89291.52952.31770.69411.50391.28120.79070.46210.54240.5764
TATA -0.0353-0.02140.0461-0.0224-0.02210.03640.0032-0.0896-0.0657-0.0574
M-score -1.740.05-4.43-10.111.9932.962.2444.3942.4036.94

Novagold Resources Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 1111111111
GMI 1111111111
AQI 17.714918.099218.232518.146717.947918.84118.736618.73719.132519.5751
SGI 0000000000
DEPI 0.81710.85790.87990.81520.76530.74820.72740.7180.70710.7513
SGAI 1111111111
LVGI 1.37941.40031.46121.551.67171.48251.58491.64711.68951.6981
TATA -0.0851-0.0868-0.0797-0.0657-0.0695-0.0656-0.058-0.0574-0.0489-0.0488
M-score 2.842.983.053.052.903.343.303.283.473.65
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK