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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 13 years, the highest Beneish M-Score of Adept Technology Inc was 3.51. The lowest was -5.33. And the median was -3.04.
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 Adept Technology Inc 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 * 1.0241||+||0.528 * 1.1019||+||0.404 * 0.9632||+||0.892 * 0.9419||+||0.115 * 1.1847|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0563||+||4.679 * 0.1066||-||0.327 * 0.742|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $10.59 Mil.|
Revenue was 13.882 + 14.114 + 11.797 + 14.402 = $54.20 Mil.
Gross Profit was 5.414 + 5.837 + 5.06 + 6.443 = $22.75 Mil.
Total Current Assets was $30.02 Mil.
Total Assets was $33.76 Mil.
Property, Plant and Equipment(Net PPE) was $1.40 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.03 Mil.
Selling, General & Admin. Expense(SGA) was $19.71 Mil.
Total Current Liabilities was $9.35 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -1.41 + -1.324 + -2.357 + 0.082 = $-5.01 Mil.
Non Operating Income was -0.076 + -0.291 + -0.174 + 0.078 = $-0.46 Mil.
Cash Flow from Operations was -0.083 + -3.856 + -1.062 + -3.142 = $-8.14 Mil.
|Accounts Receivable was $10.97 Mil.
Revenue was 14.26 + 15.121 + 14.588 + 13.571 = $57.54 Mil.
Gross Profit was 6.605 + 6.914 + 6.839 + 6.262 = $26.62 Mil.
Total Current Assets was $29.61 Mil.
Total Assets was $33.07 Mil.
Property, Plant and Equipment(Net PPE) was $1.08 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.10 Mil.
Selling, General & Admin. Expense(SGA) was $19.81 Mil.
Total Current Liabilities was $12.34 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)|
|=||(10.585 / 54.195)||/||(10.974 / 57.54)|
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)|
|=||(5.837 / 57.54)||/||(5.414 / 54.195)|
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 - (30.022 + 1.396) / 33.757)||/||(1 - (29.609 + 1.082) / 33.07)|
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))|
|=||(1.095 / (1.095 + 1.082))||/||(1.03 / (1.03 + 1.396))|
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)|
|=||(19.705 / 54.195)||/||(19.806 / 57.54)|
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 + 9.349) / 33.757)||/||((0 + 12.343) / 33.07)|
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|
|=||(-5.009 - -0.463||-||-8.143)||/||33.757|
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.
Adept Technology Inc has a M-score of -1.88 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
Adept Technology Inc Annual Data
Adept Technology Inc Quarterly Data