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

Warning Sign:

Beneish M-Score 3.36 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 10-Year Beneish M-Score Range
Min: -5.92   Max: 10.9
Current: 3.36

-5.92
10.9

During the past 13 years, the highest Beneish M-Score of Novagold Resources Inc was 10.90. The lowest was -5.92. And the median was -0.59.


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 (May15) TTM:Last Year (May14) 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 $137.87 Mil.
Total Assets was $464.82 Mil.
Property, Plant and Equipment(Net PPE) was $46.83 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.04 Mil.
Selling, General & Admin. Expense(SGA) was $21.36 Mil.
Total Current Liabilities was $2.66 Mil.
Long-Term Debt was $78.17 Mil.
Net Income was -9.184 + -9.299 + -7.103 + -12.009 = $-37.60 Mil.
Non Operating Income was -0.673 + 3.462 + 2.225 + 0.173 = $5.19 Mil.
Cash Flow from Operations was -2.536 + -5.622 + -2.447 + -1.673 = $-12.28 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 / 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 - (137.874 + 46.83) / 464.818) / (1 - ( + 53.704) / )
=0.60263157 /
=

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 + 53.704)) / (0.036 / (0.036 + 46.83))
= / 0.00076815
=

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)
=(21.356 / 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)
=((78.174 + 2.661) / 464.818) / (( + ) / )
=0.17390678 /
=

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
=(-37.595 - 5.187 - -12.278) / 464.818
=-0.0656

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

Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14
DSRI 3.75070.63534.00310.31761.50562.19351111
GMI 1.04650.90650.9981.00681.2471-0.03761111
AQI 1.75512.05681.95320.64130.89030.633828.506818.009118.990419.511
SGI 0.99812.3070.97240.50110.31880.52040000
DEPI 1.46441.69481.82360.78181.07790.42840.00550.48741.26931.2114
SGAI 0.97141.52553.43290.210916.32230.57861111
LVGI 0.98711.89291.52952.31770.69411.19571.61141.27410.74470.874
TATA 0.0001-0.0470.01320.0072-0.0229-0.0062-0.1141-0.0542-0.0896-0.0657
M-score 0.44-1.790.21-3.98-5.17-2.596.893.103.593.86

Novagold Resources Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1111111111
GMI 1111111111
AQI 17.505819.926917.044917.670217.714918.099218.232518.154517.947918.841
SGI 0000000000
DEPI 0.00060.0006-0.22840.82880.79490.83460.8560.7910.74450.7278
SGAI 1111111111
LVGI 2.07261.29241.36821.32061.37941.40031.46121.551.67171.4825
TATA -0.531-0.6141-0.6816-0.0896-0.0851-0.0868-0.0797-0.0657-0.0695-0.0656
M-score 0.351.19-0.342.822.832.983.053.052.903.34
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