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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.
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.
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|
|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
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)|
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)|
|=||(3.389 / 68.899)||/||(0.061 / 39.249)|
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 - (16.259 + 0.96) / 20.479)||/||(1 - (36.118 + 0.863) / 37.55)|
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))|
|=||(9.827 / (9.827 + 0.863))||/||(12.838 / (12.838 + 0.96))|
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)|
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)|
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|
|=||(-16.327 - 0.081||-||-12.601)||/||20.479|
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.
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