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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 Callidus Software Inc was -1.74. The lowest was -3.93. And the median was -2.89.
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 Callidus Software 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 * 0.8242||+||0.528 * 0.9574||+||0.404 * 0.7347||+||0.892 * 1.2669||+||0.115 * 0.9875|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9915||+||4.679 * -0.1639||-||0.327 * 0.7256|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $43.5 Mil.|
Revenue was 46.784 + 44.944 + 41.614 + 39.745 = $173.1 Mil.
Gross Profit was 29.607 + 27.592 + 25.711 + 23.726 = $106.6 Mil.
Total Current Assets was $152.1 Mil.
Total Assets was $241.6 Mil.
Property, Plant and Equipment(Net PPE) was $20.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.7 Mil.
Selling, General & Admin. Expense(SGA) was $92.1 Mil.
Total Current Liabilities was $101.8 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.138 + -2.243 + -4.724 + -4.043 = $-13.1 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 5.947 + 9.871 + 2.648 + 8.003 = $26.5 Mil.
|Accounts Receivable was $41.6 Mil.
Revenue was 38.126 + 35 + 32.515 + 30.977 = $136.6 Mil.
Gross Profit was 23.262 + 19.354 + 19.385 + 18.579 = $80.6 Mil.
Total Current Assets was $89.0 Mil.
Total Assets was $176.3 Mil.
Property, Plant and Equipment(Net PPE) was $18.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.5 Mil.
Selling, General & Admin. Expense(SGA) was $73.3 Mil.
Total Current Liabilities was $91.9 Mil.
Long-Term Debt was $10.5 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)|
|=||(43.461 / 173.087)||/||(41.623 / 136.618)|
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)|
|=||(27.592 / 136.618)||/||(29.607 / 173.087)|
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 - (152.055 + 20.54) / 241.642)||/||(1 - (88.973 + 18.755) / 176.298)|
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))|
|=||(10.474 / (10.474 + 18.755))||/||(11.698 / (11.698 + 20.54))|
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)|
|=||(92.075 / 173.087)||/||(73.295 / 136.618)|
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 + 101.807) / 241.642)||/||((10.481 + 91.878) / 176.298)|
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|
|=||(-13.148 - 0||-||26.469)||/||241.642|
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.
Callidus Software Inc has a M-score of -3.21 suggests that the company will not 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
Callidus Software Inc Annual Data
Callidus Software Inc Quarterly Data