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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 Majesco Entertainment Co was 24.21. The lowest was -15.56. And the median was -2.27.
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 *||+||0.528 *||+||0.404 *||+||0.892 *||+||0.115 *|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 *||+||4.679 *||-||0.327 *|
|This Year (Oct15) TTM:||Last Year (Oct14) TTM:|
|Accounts Receivable was $0.28 Mil.|
Revenue was 0.426 + 1.091 + 1.705 + 3.471 = $6.69 Mil.
Gross Profit was 0.392 + 0.724 + 0.797 + 1.357 = $3.27 Mil.
Total Current Assets was $17.62 Mil.
Total Assets was $17.66 Mil.
Property, Plant and Equipment(Net PPE) was $0.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.49 Mil.
Selling, General & Admin. Expense(SGA) was $6.96 Mil.
Total Current Liabilities was $2.00 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.79 + -0.265 + -1.598 + -1.156 = $-3.81 Mil.
Non Operating Income was 0.069 + 0.465 + 1.289 + -0.128 = $1.70 Mil.
Cash Flow from Operations was -0.758 + -1.738 + -1.4 + 2.282 = $-1.61 Mil.
|Accounts Receivable was $1.60 Mil.
Revenue was 6.283 + 2.911 + 3.24 + 21.934 = $34.37 Mil.
Gross Profit was 1.114 + 1.141 + 0.061 + 3.389 = $5.71 Mil.
Total Current Assets was $11.26 Mil.
Total Assets was $11.46 Mil.
Property, Plant and Equipment(Net PPE) was $0.20 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.44 Mil.
Selling, General & Admin. Expense(SGA) was $15.95 Mil.
Total Current Liabilities was $5.91 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)|
|=||(0.283 / 6.693)||/||(1.597 / 34.368)|
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)|
|=||(0.724 / 34.368)||/||(0.392 / 6.693)|
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 - (17.616 + 0.045) / 17.661)||/||(1 - (11.258 + 0.198) / 11.456)|
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))|
|=||(11.44 / (11.44 + 0.198))||/||(0.493 / (0.493 + 0.045))|
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)|
|=||(6.961 / 6.693)||/||(15.953 / 34.368)|
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 + 2.004) / 17.661)||/||((0 + 5.905) / 11.456)|
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|
|=||(-3.809 - 1.695||-||-1.614)||/||17.661|
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 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
Majesco Entertainment Co Annual Data
Majesco Entertainment Co Quarterly Data