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Frontline Ltd (OSTO:FROo)
Beneish M-Score
-2.94 (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 -2.80 suggests that the company is not a manipulator.

OSTO:FROO' s Beneish M-Score Range Over the Past 10 Years
Min: -6.4   Max: 23.67
Current: -2.94

-6.4
23.67

During the past 13 years, the highest Beneish M-Score of Frontline Ltd was 23.67. The lowest was -6.40. And the median was -2.63.


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 * 0+0.528 * 0.8013+0.404 * 1.492+0.892 * 1.32+0.115 * 2.2748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.2192+4.679 * -0.0262-0.327 * 0.818
=-2.80

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was Kr0 Mil.
Revenue was 1592.65780731 + 1924.60169492 + 506.669565217 + 1006.73570837 = Kr5,031 Mil.
Gross Profit was 880.797342193 + 1254.81355932 + 114.339130435 + 554.656172328 = Kr2,805 Mil.
Total Current Assets was Kr2,502 Mil.
Total Assets was Kr24,486 Mil.
Property, Plant and Equipment(Net PPE) was Kr18,396 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr773 Mil.
Selling, General & Admin. Expense(SGA) was Kr69 Mil.
Total Current Liabilities was Kr1,934 Mil.
Long-Term Debt was Kr10,722 Mil.
Net Income was 118.953488372 + 668.694915254 + 771.330434783 + 144.382767191 = Kr1,703 Mil.
Non Operating Income was -72.9318936877 + -83.8050847458 + -250.269565217 + 91.2427506214 = Kr-316 Mil.
Cash Flow from Operations was 683.936877076 + 1029.38983051 + 590.052173913 + 357.257663629 = Kr2,661 Mil.
Accounts Receivable was Kr229 Mil.
Revenue was 812.0078125 + 1154.09272582 + 983.253275109 + 861.620076239 = Kr3,811 Mil.
Gross Profit was 398.4765625 + 660.463629097 + 382.459970888 + 261.118170267 = Kr1,703 Mil.
Total Current Assets was Kr1,754 Mil.
Total Assets was Kr6,817 Mil.
Property, Plant and Equipment(Net PPE) was Kr4,393 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr444 Mil.
Selling, General & Admin. Expense(SGA) was Kr238 Mil.
Total Current Liabilities was Kr1,347 Mil.
Long-Term Debt was Kr2,961 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 / 5030.66477581) / (228.7265625 / 3810.97388967)
=0 / 0.06001788
=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)
=(1702.51833275 / 3810.97388967) / (2804.60620428 / 5030.66477581)
=0.44674101 / 0.55750211
=0.8013

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 - (2502.04318937 + 18396.0299003) / 24485.5730897) / (1 - (1754.4140625 + 4393.234375) / 6817.078125)
=0.14651485 / 0.09819892
=1.492

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
=5030.66477581 / 3810.97388967
=1.32

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))
=(443.739642691 / (443.739642691 + 4393.234375)) / (773.060247847 / (773.060247847 + 18396.0299003))
=0.0917391 / 0.04032848
=2.2748

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)
=(68.7370211718 / 5030.66477581) / (237.604640553 / 3810.97388967)
=0.01366361 / 0.06234749
=0.2192

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)
=((10721.744186 + 1933.81229236) / 24485.5730897) / ((2961.03125 + 1346.5625) / 6817.078125)
=0.51685768 / 0.6318827
=0.818

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
=(1703.3616056 - -315.763793029 - 2660.63654513) / 24485.5730897
=-0.0262

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 -2.80 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.78851.09510.63941.46231.19961.23830.60850.64461.47993.6933
GMI 1.08151.07850.89361.02541.04211.9671.19041.28180.60930.6236
AQI 3.68521.7870.57070.50181.27041.33041.231.43211.39940.8436
SGI 0.9580.80942.02090.4161.09170.64920.80630.84681.28380.9797
DEPI 0.96750.77731.09350.89671.19470.49761.49280.9590.78864.8452
SGAI 1.46591.24486.35210.34352.93960.27981.10121.2051.19170.3164
LVGI 1.00131.1970.93680.96911.00661.1021.04281.0440.99940.5204
TATA -0.0711-0.0293-0.0302-0.0599-0.0392-0.3347-0.0921-0.1077-0.1783-0.0132
M-score -2.00-2.47-3.16-2.93-2.58-3.46-3.23-3.18-2.720.37

Frontline Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1101.763311.545913.725810
GMI 0.83790.90360.9190.78550.79290.61860.5970.66560.71260.8013
AQI 1.20031.26921.74551.39941.4481.0870.79130.84360.78291.492
SGI 0.99750.95680.97991.07751.0281.12971.13670.97111.14311.32
DEPI 3.48914.74562.81740.23360.26880.20850.42185.16963.15082.2748
SGAI 0.65331.1381.24991.26981.41850.9881.01180.00630.03940.2192
LVGI 1.07540.99291.08470.99941.00540.63770.65690.52040.50760.818
TATA -0.0997-0.1329-0.1906-0.1467-0.1268-0.0837-0.0547-0.0055-0.0106-0.0262
M-score -2.63-2.67-3.91-2.48-3.13-2.39-2.870.54-2.07-2.80
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