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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 2.56. The lowest was -4.14. And the median was -2.94.
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 * 1.0633||+||0.528 * 0.976||+||0.404 * 0.7252||+||0.892 * 1.2006||+||0.115 * 1.2002|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0044||+||4.679 * -0.1198||-||0.327 * 0.8444|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $48.4 Mil.|
Revenue was 52.507 + 49.751 + 48.378 + 46.784 = $197.4 Mil.
Gross Profit was 32.33 + 31.282 + 30.155 + 29.607 = $123.4 Mil.
Total Current Assets was $249.4 Mil.
Total Assets was $359.3 Mil.
Property, Plant and Equipment(Net PPE) was $31.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $107.7 Mil.
Total Current Liabilities was $124.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -3.947 + -5.687 + -4.535 + -2.138 = $-16.3 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 7.794 + 6.863 + 6.112 + 5.947 = $26.7 Mil.
|Accounts Receivable was $37.9 Mil.
Revenue was 44.944 + 41.614 + 39.745 + 38.126 = $164.4 Mil.
Gross Profit was 27.592 + 25.711 + 23.726 + 23.262 = $100.3 Mil.
Total Current Assets was $143.7 Mil.
Total Assets was $234.3 Mil.
Property, Plant and Equipment(Net PPE) was $20.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.3 Mil.
Selling, General & Admin. Expense(SGA) was $89.3 Mil.
Total Current Liabilities was $96.5 Mil.
Long-Term Debt was $0.0 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)|
|=||(48.444 / 197.42)||/||(37.945 / 164.429)|
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)|
|=||(100.291 / 164.429)||/||(123.374 / 197.42)|
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 - (249.382 + 31.566) / 359.261)||/||(1 - (143.654 + 20.226) / 234.31)|
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))|
|=||(11.34 / (11.34 + 20.226))||/||(13.484 / (13.484 + 31.566))|
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)|
|=||(107.672 / 197.42)||/||(89.284 / 164.429)|
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 + 124.872) / 359.261)||/||((0 + 96.452) / 234.31)|
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|
|=||(-16.307 - 0||-||26.716)||/||359.261|
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 -2.85 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