Switch to:
Frontline Ltd (OSTO:FROo)
Beneish M-Score
-4.36 (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 -4.26 suggests that the company is not a manipulator.

OSTO:FROO' s 10-Year Beneish M-Score Range
Min: -4.36   Max: 23.67
Current: -4.36

-4.36
23.67

During the past 13 years, the highest Beneish M-Score of Frontline Ltd was 23.67. The lowest was -4.36. And the median was -2.53.


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 * 0.7595+0.404 * 1.7455+0.892 * 1.1414+0.115 * 1.1889
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.5219+4.679 * -0.1905-0.327 * 1.0847
=-4.26

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was Kr0 Mil.
Revenue was 863.815286624 + 721.042424242 + 1017.95209581 + 880.803680982 = Kr3,484 Mil.
Gross Profit was 213.197452229 + 143.951515152 + 396.676646707 + 188.404907975 = Kr942 Mil.
Total Current Assets was Kr1,642 Mil.
Total Assets was Kr6,612 Mil.
Property, Plant and Equipment(Net PPE) was Kr4,070 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr605 Mil.
Selling, General & Admin. Expense(SGA) was Kr235 Mil.
Total Current Liabilities was Kr2,066 Mil.
Long-Term Debt was Kr5,313 Mil.
Net Income was -379.917197452 + -474.121212121 + -72.3652694611 + -79.9447852761 = Kr-1,006 Mil.
Non Operating Income was -2.62420382166 + 47.9090909091 + 5.0119760479 + -72.3987730061 = Kr-22 Mil.
Cash Flow from Operations was 112.929936306 + -2.6 + 126.658682635 + 38.226993865 = Kr275 Mil.
Accounts Receivable was Kr119 Mil.
Revenue was 752.94047619 + 713.070588235 + 727.76300578 + 858.320224719 = Kr3,052 Mil.
Gross Profit was 197.535714286 + 82.3294117647 + 143.947976879 + 203.174157303 = Kr627 Mil.
Total Current Assets was Kr1,653 Mil.
Total Assets was Kr8,388 Mil.
Property, Plant and Equipment(Net PPE) was Kr6,082 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr1,105 Mil.
Selling, General & Admin. Expense(SGA) was Kr82 Mil.
Total Current Liabilities was Kr803 Mil.
Long-Term Debt was Kr7,828 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 / 3483.61348766) / (118.535714286 / 3052.09429493)
=0 / 0.0388375
=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)
=(143.951515152 / 3052.09429493) / (213.197452229 / 3483.61348766)
=0.20542854 / 0.27047505
=0.7595

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 - (1642.24840764 + 4070.43312102) / 6611.68789809) / (1 - (1652.55357143 + 6081.79166667) / 8387.75595238)
=0.13597229 / 0.07790054
=1.7455

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
=3483.61348766 / 3052.09429493
=1.1414

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))
=(1104.87996574 / (1104.87996574 + 6081.79166667)) / (604.528872203 / (604.528872203 + 4070.43312102))
=0.15374015 / 0.12931204
=1.1889

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)
=(235.222405152 / 3483.61348766) / (81.7166678583 / 3052.09429493)
=0.06752253 / 0.02677397
=2.5219

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)
=((5312.86624204 + 2066.01273885) / 6611.68789809) / ((7827.57142857 + 802.892857143) / 8387.75595238)
=1.11603559 / 1.02893603
=1.0847

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
=(-1006.34846431 - -22.1019098708 - 275.215612805) / 6611.68789809
=-0.1905

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 -4.26 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.84570.6341.09510.63941.46231.25371.15420.72160.5581
GMI 0.77581.064900.89361.02541.34631.43781.22381.3204
AQI 0.36820.86531.7870.57070.50181.27041.33041.231.4321
SGI 1.4530.8880.812.0160.41811.04340.69530.68180.9765
DEPI 0.79351.06990.77731.09350.89671.19470.49761.49280.9435
SGAI 0.76691.01311.24482.53473.15290.26590.82281.30591.0431
LVGI 0.99741.03751.1970.93680.96911.00661.1021.04281.044
TATA 0.0645-0.099-0.0293-0.0298-0.0599-0.044-0.3233-0.0921-0.1077
M-score -1.35-3.41-3.04-2.51-3.41-1.98-3.82-3.25-3.10

Frontline Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 110.71471110.5474110
GMI 1.36171.3071.52121.87361.68231.16261.0340.61980.57930.7595
AQI 16.73161.45921.231.44080.12161.42821.43211.20031.26921.7455
SGI 0.69940.71040.68840.73580.81150.92470.99551.13541.14471.1414
DEPI 0.220.74110.88180.85582.20660.63151.58661.46851.57581.1889
SGAI 2.81221.32510.25710.25990.22440.58524.87714.27394.94662.5219
LVGI 1.12341.10171.04281.05511.12511.13061.0441.01920.99291.0847
TATA -0.3486-0.3127-0.1263-0.1198-0.1252-0.1252-0.1039-0.1347-0.1326-0.1905
M-score 1.73-3.97-3.14-2.54-3.00-2.89-3.81-3.62-3.70-4.26
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)
Free 7-day Trial
FEEDBACK