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Majesco Entertainment Co (NAS:COOL)
Beneish M-Score
0.39 (As of Today)

Warning Sign:

Beneish M-Score 0.39 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Majesco Entertainment Co has a M-score of 0.39 signals that the company is a manipulator.

COOL' s 10-Year Beneish M-Score Range
Min: -15.56   Max: 24.22
Current: 0.39

-15.56
24.22

During the past 13 years, the highest Beneish M-Score of Majesco Entertainment Co was 24.22. The lowest was -15.56. And the median was -1.63.


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 Majesco Entertainment Co 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 * 0.9036+0.528 * 1.9423+0.404 * 10.5053+0.892 * 0.5697+0.115 * 0.988
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3548+4.679 * -0.1859-0.327 * 1.188
=0.39

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $1.00 Mil.
Revenue was 3.24 + 21.934 + 10.077 + 3.998 = $39.25 Mil.
Gross Profit was 0.061 + 3.389 + 0.746 + 1.235 = $5.43 Mil.
Total Current Assets was $16.26 Mil.
Total Assets was $20.48 Mil.
Property, Plant and Equipment(Net PPE) was $0.96 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.84 Mil.
Selling, General & Admin. Expense(SGA) was $16.44 Mil.
Total Current Liabilities was $7.78 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -3.585 + -4.512 + -4.586 + -3.644 = $-16.33 Mil.
Non Operating Income was -0.166 + 0.247 + 0 + 0 = $0.08 Mil.
Cash Flow from Operations was -1.36 + 1.023 + -5.668 + -6.596 = $-12.60 Mil.
Accounts Receivable was $1.94 Mil.
Revenue was 9.72 + 23.472 + 26.562 + 9.145 = $68.90 Mil.
Gross Profit was 3.035 + 7.152 + 4.814 + 3.516 = $18.52 Mil.
Total Current Assets was $36.12 Mil.
Total Assets was $37.55 Mil.
Property, Plant and Equipment(Net PPE) was $0.86 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.83 Mil.
Selling, General & Admin. Expense(SGA) was $21.30 Mil.
Total Current Liabilities was $12.01 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)
=(0.996 / 39.249) / (1.935 / 68.899)
=0.02537644 / 0.02808459
=0.9036

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)
=(3.389 / 68.899) / (0.061 / 39.249)
=0.26875571 / 0.13837295
=1.9423

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 - (16.259 + 0.96) / 20.479) / (1 - (36.118 + 0.863) / 37.55)
=0.15918746 / 0.01515313
=10.5053

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
=39.249 / 68.899
=0.5697

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))
=(9.827 / (9.827 + 0.863)) / (12.838 / (12.838 + 0.96))
=0.91927035 / 0.9304247
=0.988

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)
=(16.442 / 39.249) / (21.304 / 68.899)
=0.41891513 / 0.30920623
=1.3548

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 + 7.783) / 20.479) / ((0 + 12.012) / 37.55)
=0.38004785 / 0.31989348
=1.188

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
=(-16.327 - 0.081 - -12.601) / 20.479
=-0.1859

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.

Majesco Entertainment Co has a M-score of 0.39 signals that the company is likely to 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 own currency.

Majesco Entertainment Co Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
DSRI 10.30912.65440.20423.61020.51690.93761.41583.81560.5624
GMI 1.1809-12.3813-0.0780.87660.93841.490.9980.66961.10341.2778
AQI 28.11660.03811.02278.41130.08850.82620.78971.73662.98917.9478
SGI 2.59580.49361.11670.76431.25351.47840.80091.65621.05580.3573
DEPI 0.3060.99581.02371.09930.93230.94961.04321.09470.89541.0601
SGAI 0.5733.65060.56550.93260.9180.86240.89210.91931.13571.6483
LVGI 0.37811.28471.04560.85080.91560.82421.04950.87210.77991.1543
TATA 0.59440.4421-0.5307-0.11680.3097-0.00690.05260.005-0.0692-0.2144
M-score 12.97-9.50-3.83-0.971.23-2.27-2.55-1.300.73-1.66

Majesco Entertainment Co Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 0.85420.91850.3033.81560.56860.46880.93410.56240.90120.9036
GMI 0.90391.0231.11071.10341.10671.24791.28841.27781.67951.9423
AQI 1.47391.39350.58842.98914.58955.08275.31587.947810.007110.5053
SGI 1.50681.21631.05931.05580.62640.48770.48720.35730.51050.5697
DEPI 1.0270.98430.89720.89540.99111.01291.01811.06011.010.988
SGAI 0.82281.05671.16591.13581.4831.48891.36021.64831.34951.3548
LVGI 0.97281.01011.04780.77990.83480.90320.92091.15431.03661.188
TATA -0.0701-0.1371-0.1121-0.0692-0.2771-0.1445-0.098-0.2135-0.1144-0.1859
M-score -2.31-2.85-3.760.73-3.03-2.37-1.59-1.660.380.39
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