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GuruFocus has detected 6 Warning Signs with Houston American Energy Corp $HUSA.
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Houston American Energy Corp (AMEX:HUSA)
Beneish M-Score
-6.83 (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.

Houston American Energy Corp has a M-score of -6.83 suggests that the company is not a manipulator.

HUSA' s Beneish M-Score Range Over the Past 10 Years
Min: -35.01   Max: 668.31
Current: -6.83

-35.01
668.31

During the past 13 years, the highest Beneish M-Score of Houston American Energy Corp was 668.31. The lowest was -35.01. And the median was -2.12.


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 Houston American Energy Corp 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 * 1.7762+0.404 * 1.3553+0.892 * 0.4693+0.115 * 2.1645
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.9469+4.679 * -0.3785-0.327 * 5.6925
=-6.83

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 0.058 + 0.044 + 0.04 + 0.034 = $0.18 Mil.
Gross Profit was 0.034 + 0.007 + 0.017 + 0.007 = $0.07 Mil.
Total Current Assets was $0.36 Mil.
Total Assets was $3.80 Mil.
Property, Plant and Equipment(Net PPE) was $3.44 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.30 Mil.
Selling, General & Admin. Expense(SGA) was $1.99 Mil.
Total Current Liabilities was $0.15 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.502 + -1.441 + -0.37 + -0.49 = $-2.80 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -0.362 + -0.274 + -0.31 + -0.419 = $-1.37 Mil.
Accounts Receivable was $0.26 Mil.
Revenue was 0.048 + 0.089 + 0.124 + 0.114 = $0.38 Mil.
Gross Profit was 0.038 + 0.053 + 0.072 + 0.083 = $0.25 Mil.
Total Current Assets was $2.00 Mil.
Total Assets was $5.15 Mil.
Property, Plant and Equipment(Net PPE) was $3.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.65 Mil.
Selling, General & Admin. Expense(SGA) was $1.44 Mil.
Total Current Liabilities was $0.04 Mil.
Long-Term Debt was $0.00 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 / 0.176) / (0.262 / 0.375)
=0 / 0.69866667
=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)
=(0.246 / 0.375) / (0.065 / 0.176)
=0.656 / 0.36931818
=1.7762

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 - (0.359 + 3.437) / 3.799) / (1 - (1.997 + 3.149) / 5.149)
=0.00078968 / 0.00058264
=1.3553

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
=0.176 / 0.375
=0.4693

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))
=(0.65 / (0.65 + 3.149)) / (0.295 / (0.295 + 3.437))
=0.17109766 / 0.07904609
=2.1645

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)
=(1.993 / 0.176) / (1.441 / 0.375)
=11.32386364 / 3.84266667
=2.9469

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 + 0.147) / 3.799) / ((0 + 0.035) / 5.149)
=0.03869439 / 0.00679744
=5.6925

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
=(-2.803 - 0 - -1.365) / 3.799
=-0.3785

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.

Houston American Energy Corp has a M-score of -6.83 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 local exchange's currency.

Houston American Energy Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.14450.25627.58761.17580.1336235.7140.66224.44570.02480
GMI 1.08260.92251.64490.71272.23010.49710.68821.10891.05141.5758
AQI 0.72361663.64230.71370.57081.03190.00151.50170.72053.34781.8879
SGI 1.55392.13420.76412.40380.05930.35550.84431.04611.18180.3869
DEPI 1.63670.19193.66580.627529.42280.68921.75010.10470.31571.7726
SGAI 0.79040.91041.15380.714916.5392.85470.80510.65940.55323.0707
LVGI 0.60943.76660.23316.43760.066641.53340.067629.17850.01442.8791
TATA -0.0631-0.0436-0.0054-0.26010.0081-2.6837-0.2288-0.1185-0.3408-0.4567
M-score -1.98668.334.10-4.38-2.51186.05-3.54-9.14-3.51-6.30

Houston American Energy Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 4.445727.81040.98120.03310.02480.0311.23911.906900
GMI 1.10891.13541.11091.05941.05141.03611.20531.2491.57581.7762
AQI 0.72050.79621.56761.27123.34783.19461.69692.59561.88791.3554
SGI 1.04610.81960.83541.26811.18181.04460.72660.44610.38690.4693
DEPI 0.10470.060.10660.16290.31570.5450.77141.13391.77782.1645
SGAI 0.65940.85280.85060.57560.55320.62591.25322.10583.0692.9469
LVGI 29.178530.09712.2890.02850.01440.01340.33940.43812.87915.6925
TATA -0.1185-0.1747-0.3071-0.3308-0.341-0.2793-0.3561-0.3632-0.4557-0.3785
M-score -9.1411.60-4.29-4.24-3.51-3.40-3.63-3.05-6.30-6.83
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