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Frontline Ltd (OSTO:FROo)
Beneish M-Score
-1.91 (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 -10.96 suggests that the company is not a manipulator.

OSTO:FROO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.79   Max: 23.67
Current: -1.91

-3.79
23.67

During the past 13 years, the highest Beneish M-Score of Frontline Ltd was 23.67. The lowest was -3.79. And the median was -2.35.


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 * 1.7553+0.528 * 0.7412+0.404 * 0.2394+0.892 * 2.9306+0.115 * 0.818
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 59.9649+4.679 * -0.0087-0.327 * 1.7529
=-10.96

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was Kr499 Mil.
Revenue was 506.669565217 + 1006.73570837 + 1052.9453125 + 1154.09272582 = Kr3,720 Mil.
Gross Profit was 114.339130435 + 554.656172328 + 615.34375 + 660.463629097 = Kr1,945 Mil.
Total Current Assets was Kr4,065 Mil.
Total Assets was Kr25,101 Mil.
Property, Plant and Equipment(Net PPE) was Kr18,693 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr424 Mil.
Selling, General & Admin. Expense(SGA) was Kr340 Mil.
Total Current Liabilities was Kr2,105 Mil.
Long-Term Debt was Kr10,395 Mil.
Net Income was 771.330434783 + 144.382767191 + 135.703125 + 248.792965627 = Kr1,300 Mil.
Non Operating Income was -245.252173913 + 91.2427506214 + -25.984375 + 51.2310151878 = Kr-129 Mil.
Cash Flow from Operations was 590.052173913 + 357.257663629 + 357.015625 + 343.501199041 = Kr1,648 Mil.
Accounts Receivable was Kr97 Mil.
Revenue was -1330.15283843 + 861.620076239 + 718.864048338 + 1019.17266187 = Kr1,270 Mil.
Gross Profit was -309.941775837 + 261.118170267 + 143.516616314 + 397.152278177 = Kr492 Mil.
Total Current Assets was Kr3,180 Mil.
Total Assets was Kr18,208 Mil.
Property, Plant and Equipment(Net PPE) was Kr7,926 Mil.
Depreciation, Depletion and Amortization(DDA) was Kr146 Mil.
Selling, General & Admin. Expense(SGA) was Kr2 Mil.
Total Current Liabilities was Kr1,726 Mil.
Long-Term Debt was Kr3,446 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)
=(498.843478261 / 3720.4433119) / (96.9723435226 / 1269.50394802)
=0.13408173 / 0.07638601
=1.7553

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)
=(554.656172328 / 1269.50394802) / (114.339130435 / 3720.4433119)
=0.38743108 / 0.52273413
=0.7412

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 - (4064.91304348 + 18692.6695652) / 25101.3391304) / (1 - (3179.82532751 + 7925.53857351) / 18207.9184862)
=0.09337177 / 0.39008054
=0.2394

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
=3720.4433119 / 1269.50394802
=2.9306

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))
=(146.343178123 / (146.343178123 + 7925.53857351)) / (423.688656882 / (423.688656882 + 18692.6695652))
=0.01813 / 0.02216367
=0.818

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)
=(340.241342558 / 3720.4433119) / (1.93610842725 / 1269.50394802)
=0.09145183 / 0.00152509
=59.9649

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)
=((10395.0782609 + 2104.66956522) / 25101.3391304) / ((3446.31004367 + 1726.39737991) / 18207.9184862)
=0.49797135 / 0.28409109
=1.7529

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
=(1300.2092926 - -128.762783104 - 1647.82666158) / 25101.3391304
=-0.0087

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 -10.96 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 0.7851.21420.58611.46231.19961.23830.60850.64461.04095.2508
GMI 1.10411.13830.98330.86871.04211.9671.19041.28180.60930.6236
AQI 3.68521.7870.57070.50181.27041.33041.231.43214.93170.2394
SGI 0.96210.732.20460.4161.09170.64920.80630.84681.28380.9797
DEPI 0.96750.781.08980.89671.19470.49761.49280.9591.31122.9139
SGAI 1.45361.37710.55993.57272.93960.27981.10121.2051.19170.3164
LVGI 1.00131.1970.93680.96911.00661.1021.04281.0440.29671.7529
TATA -0.0711-0.0293-0.0253-0.0591-0.0392-0.3347-0.0921-0.1077-0.0686-0.0134
M-score -1.99-2.42-1.98-3.57-2.58-3.46-3.23-3.18-0.900.94

Frontline Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 12.32571110.76221111.7553
GMI 0.88840.69730.34580.30810.32990.76060.85450.73170.70650.7412
AQI 1.42821.43211.20031.26921.74554.93171.4481.0870.79130.2394
SGI 1.09390.23470.3430.34720.371.75331.3831.70091.66842.9306
DEPI 1.06913.97733.83914.60472.73441.1780.80280.64292.02610.818
SGAI 0.88140.38990.35060.63940.9290.06310.85834.36553.232459.9649
LVGI 1.13061.0441.07541.04891.08470.29671.00540.60370.65691.7529
TATA -0.12480.0264-0.00180.0117-0.02480.02630.07020.1260.148-0.0087
M-score -2.88-1.37-2.93-2.80-3.03-0.03-1.71-1.86-1.58-10.96
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