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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.
During the past 8 years, the highest Beneish M-Score of Sandstorm Gold Ltd was 181.84. The lowest was -2.05. And the median was 1.56.
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 Sandstorm Gold 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 * 1.412||+||0.528 * 1.6246||+||0.404 * 1.67||+||0.892 * 0.7409||+||0.115 * 1.0646|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.5295||+||4.679 * -0.0533||-||0.327 * 0.9316|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $2.75 Mil.|
Revenue was 12.488 + 15.559 + 13.153 + 0.952 = $42.15 Mil.
Gross Profit was 2.376 + 3.57 + 3.308 + 0.148 = $9.40 Mil.
Total Current Assets was $92.97 Mil.
Total Assets was $431.07 Mil.
Property, Plant and Equipment(Net PPE) was $261.88 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.13 Mil.
Selling, General & Admin. Expense(SGA) was $6.01 Mil.
Total Current Liabilities was $3.63 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 2.608 + 2.076 + 3.039 + -10.095 = $-2.37 Mil.
Non Operating Income was 0.305 + 0.753 + 0.512 + -9.715 = $-8.15 Mil.
Cash Flow from Operations was 8.85 + 9.962 + 9.383 + 0.56 = $28.76 Mil.
|Accounts Receivable was $2.63 Mil.
Revenue was 15.767 + 15.352 + 13.353 + 12.423 = $56.90 Mil.
Gross Profit was 4.567 + 5.064 + 4.262 + 6.724 = $20.62 Mil.
Total Current Assets was $101.56 Mil.
Total Assets was $379.70 Mil.
Property, Plant and Equipment(Net PPE) was $237.94 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.50 Mil.
Selling, General & Admin. Expense(SGA) was $15.32 Mil.
Total Current Liabilities was $3.43 Mil.
Long-Term Debt was $0.00 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(2.746 / 42.152)||/||(2.625 / 56.895)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(3.57 / 56.895)||/||(2.376 / 42.152)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (92.97 + 261.882) / 431.07)||/||(1 - (101.561 + 237.94) / 379.703)|
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.
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))|
|=||(22.503 / (22.503 + 237.94))||/||(23.131 / (23.131 + 261.882))|
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)|
|=||(6.01 / 42.152)||/||(15.321 / 56.895)|
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)|
|=||((0 + 3.631) / 431.07)||/||((0 + 3.433) / 379.703)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-2.372 - -8.145||-||28.755)||/||431.07|
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.
Sandstorm Gold Ltd has a M-score of -1.87 signals that the company is likely to be a manipulator.
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
Sandstorm Gold Ltd Annual Data
Sandstorm Gold Ltd Quarterly Data