Switch to:
Frontline Ltd (OSTO:FROo)
Beneish M-Score
-3.34 (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.

Frontline Ltd has a M-score of -3.03 suggests that the company is not a manipulator.

OSTO:FROO' s 10-Year Beneish M-Score Range
Min: -4.41   Max: 23.67
Current: -3.34

-4.41
23.67

During the past 13 years, the highest Beneish M-Score of Frontline Ltd was 23.67. The lowest was -4.41. And the median was -2.61.


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 Frontline Ltd 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 * 1+0.528 * 0.6644+0.404 * 1.448+0.892 * 1.1042+0.115 * 1.035
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3492+4.679 * -0.1249-0.327 * 1.0054
=-3.03

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was Kr0 Mil.
Revenue was 1154.09272582 + 983.253275109 + 861.620076239 + 718.864048338 = Kr3,718 Mil.
Gross Profit was 660.463629097 + 382.459970888 + 261.118170267 + 143.516616314 = Kr1,448 Mil.
Total Current Assets was Kr1,608 Mil.
Total Assets was Kr7,641 Mil.
Property, Plant and Equipment(Net PPE) was Kr5,170 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr516 Mil.
Selling, General & Admin. Expense(SGA) was Kr288 Mil.
Total Current Liabilities was Kr1,952 Mil.
Long-Term Debt was Kr5,674 Mil.
Net Income was 248.792965627 + -94.4395924309 + -378.951715375 + -472.688821752 = Kr-697 Mil.
Non Operating Income was 51.2310151878 + -401.404657933 + -2.61753494282 + 47.7643504532 = Kr-305 Mil.
Cash Flow from Operations was 343.501199041 + 108.740902475 + 112.642947903 + -2.59214501511 = Kr562 Mil.
Accounts Receivable was Kr0 Mil.
Revenue was 1019.17266187 + 880.803680982 + 754.737470167 + 712.23266745 = Kr3,367 Mil.
Gross Profit was 397.152278177 + 246.503067485 + 145.119331742 + 82.2326674501 = Kr871 Mil.
Total Current Assets was Kr1,983 Mil.
Total Assets was Kr8,238 Mil.
Property, Plant and Equipment(Net PPE) was Kr5,612 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr581 Mil.
Selling, General & Admin. Expense(SGA) was Kr194 Mil.
Total Current Liabilities was Kr1,042 Mil.
Long-Term Debt was Kr7,135 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 / 3717.83012551) / (0 / 3366.94648047)
=0 / 0
=1

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)
=(382.459970888 / 3366.94648047) / (660.463629097 / 3717.83012551)
=0.25869355 / 0.38935571
=0.6644

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 - (1607.60991207 + 5169.92805755) / 7640.89528377) / (1 - (1983.11151079 + 5611.93645084) / 8237.89568345)
=0.11299164 / 0.07803543
=1.448

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
=3717.83012551 / 3366.94648047
=1.1042

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))
=(581.245598053 / (581.245598053 + 5611.93645084)) / (515.526256589 / (515.526256589 + 5169.92805755))
=0.0938525 / 0.09067459
=1.035

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)
=(288.329055205 / 3717.83012551) / (193.540285787 / 3366.94648047)
=0.07755305 / 0.05748244
=1.3492

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)
=((5673.66107114 + 1951.53477218) / 7640.89528377) / ((7134.76618705 + 1041.69664269) / 8237.89568345)
=0.99794534 / 0.99254265
=1.0054

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
=(-697.28716393 - -305.026827235 - 562.292904404) / 7640.89528377
=-0.1249

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.

Frontline Ltd has a M-score of -3.03 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 own currency.

Frontline Ltd Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.6341.09510.63941.46231.25371.15420.72160.55811.4799
GMI 1.064900.89361.02541.34631.43781.22381.32040.6093
AQI 0.86531.7870.57070.50181.27041.33041.231.43211.3994
SGI 0.88980.80942.02090.4161.04460.69650.67990.97821.2838
DEPI 1.06990.77731.09350.89671.19470.49761.49280.96370.766
SGAI 1.01311.24482.53473.15290.26590.82281.30591.04311.1917
LVGI 1.03751.1970.93680.96911.00661.1021.04281.0440.9994
TATA -0.099-0.0293-0.0298-0.0599-0.044-0.3233-0.0921-0.1077-0.1762
M-score -3.40-3.04-2.50-3.42-1.97-3.82-3.25-3.09-2.71

Frontline Ltd Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.72461110.54751111.63091
GMI 1.57221.9491.68071.26781.02290.61420.57580.62470.60770.6644
AQI 1.231.44081.34861.42821.43211.20031.26921.74551.39941.448
SGI 0.67710.72290.81070.92480.9971.13721.14591.14051.1651.1042
DEPI 0.88140.85750.71080.63271.61971.49241.59851.2030.85541.035
SGAI 0.96740.95860.86221.35561.31531.17771.29461.09721.20061.3492
LVGI 1.04281.05511.12511.13061.0441.07540.99291.08470.99941.0054
TATA -0.1263-0.1196-0.1252-0.1248-0.1039-0.1345-0.1329-0.1906-0.1446-0.1249
M-score -3.24-2.63-2.78-2.96-3.20-3.11-3.07-3.16-2.53-3.03
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)

GuruFocus Premium Plus Membership

FEEDBACK