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GuruFocus has detected 4 Warning Signs with Callidus Software Inc $CALD.
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Callidus Software Inc (NAS:CALD)
Beneish M-Score
-2.84 (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.

Callidus Software Inc has a M-score of -2.84 suggests that the company is not a manipulator.

CALD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.93   Max: -1.59
Current: -2.84

-3.93
-1.59

During the past 13 years, the highest Beneish M-Score of Callidus Software Inc was -1.59. The lowest was -3.93. And the median was -2.87.


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 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 * 1.0686+0.528 * 0.99+0.404 * 0.8152+0.892 * 1.1943+0.115 * 1.2519
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0403+4.679 * -0.1261-0.327 * 0.837
=-2.84

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $55.5 Mil.
Revenue was 56.082 + 52.507 + 49.751 + 48.378 = $206.7 Mil.
Gross Profit was 34.874 + 32.33 + 31.282 + 30.155 = $128.6 Mil.
Total Current Assets was $261.0 Mil.
Total Assets was $386.5 Mil.
Property, Plant and Equipment(Net PPE) was $35.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.5 Mil.
Selling, General & Admin. Expense(SGA) was $114.4 Mil.
Total Current Liabilities was $136.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -4.797 + -3.947 + -5.687 + -4.535 = $-19.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 9.01 + 7.794 + 6.863 + 6.112 = $29.8 Mil.
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.



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)
=(55.464 / 206.718) / (43.461 / 173.087)
=0.26830755 / 0.25109338
=1.0686

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)
=(106.636 / 173.087) / (128.641 / 206.718)
=0.61608324 / 0.62230188
=0.99

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 - (261.013 + 35.456) / 386.501) / (1 - (152.055 + 20.54) / 241.642)
=0.23294118 / 0.28574089
=0.8152

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
=206.718 / 173.087
=1.1943

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))
=(11.698 / (11.698 + 20.54)) / (14.472 / (14.472 + 35.456))
=0.3628637 / 0.28985739
=1.2519

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)
=(114.396 / 206.718) / (92.075 / 173.087)
=0.55339158 / 0.53195792
=1.0403

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 + 136.288) / 386.501) / ((0 + 101.807) / 241.642)
=0.35262004 / 0.42131335
=0.837

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
=(-18.966 - 0 - 29.779) / 386.501
=-0.1261

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 -2.84 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.

Callidus Software Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.76980.90830.74031.79050.92560.91421.09431.17150.82421.0686
GMI 1.18781.06091.0890.95521.0140.85780.81770.97420.95740.99
AQI 3.62293.59940.98071.19821.65331.2870.85551.01870.73470.8152
SGI 1.32781.06060.75630.87441.18191.13351.18311.21611.26691.1943
DEPI 0.86320.67880.981.35460.79021.12830.97111.25550.98751.2519
SGAI 0.89180.91960.9891.04921.07041.21870.93351.04150.99151.0403
LVGI 1.15361.31391.12761.14241.46591.10060.6420.97840.72560.837
TATA -0.1145-0.2382-0.2127-0.1862-0.1265-0.2084-0.2264-0.1175-0.1639-0.1261
M-score -1.82-2.67-3.93-2.69-2.90-3.43-3.32-2.66-3.21-2.84

Callidus Software Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.15251.17151.16661.16190.92270.82420.89560.88281.06331.0686
GMI 0.91040.97421.01171.01730.96630.95740.94770.95360.9760.99
AQI 1.03461.01870.71910.78990.71630.73470.97611.08370.72520.8152
SGI 1.19831.21611.23451.24231.27781.26691.24991.2291.20061.1943
DEPI 0.96271.25551.14941.16981.22530.98751.02181.09311.20021.2519
SGAI 1.02421.04151.04671.07731.02360.99150.99810.98071.00441.0403
LVGI 0.59930.97840.71360.81330.75430.72560.99351.10130.84440.837
TATA -0.1609-0.1175-0.1046-0.1372-0.148-0.1639-0.1547-0.168-0.1198-0.1261
M-score -2.83-2.66-2.61-2.77-3.03-3.21-3.11-3.18-2.85-2.84
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