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Beneish M-Score 0.38 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 Company has a M-score of 0.38 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Majesco Entertainment Company was 24.22. The lowest was -15.56. And the median was -1.66.
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 Company 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 * 0.9012||+||0.528 * 1.6795||+||0.404 * 10.0071||+||0.892 * 0.5105||+||0.115 * 1.01|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3495||+||4.679 * -0.1144||-||0.327 * 1.0366|
|This Year (Jan14) TTM:||Last Year (Jan13) TTM:|
|Accounts Receivable was $3.08 Mil.|
Revenue was 21.934 + 10.077 + 3.998 + 9.72 = $45.73 Mil.
Gross Profit was 3.389 + 0.746 + 1.235 + 3.035 = $8.41 Mil.
Total Current Assets was $20.96 Mil.
Total Assets was $25.37 Mil.
Property, Plant and Equipment(Net PPE) was $1.03 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.70 Mil.
Selling, General & Admin. Expense(SGA) was $17.21 Mil.
Total Current Liabilities was $9.40 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -4.512 + -4.586 + -3.644 + -2.271 = $-15.01 Mil.
Non Operating Income was 0.247 + 0 + 0 + 0 = $0.25 Mil.
Cash Flow from Operations was 1.023 + -5.668 + -6.596 + -1.116 = $-12.36 Mil.
|Accounts Receivable was $6.70 Mil.
Revenue was 23.472 + 26.562 + 9.145 + 30.4 = $89.58 Mil.
Gross Profit was 7.152 + 4.814 + 3.516 + 12.171 = $27.65 Mil.
Total Current Assets was $41.27 Mil.
Total Assets was $42.68 Mil.
Property, Plant and Equipment(Net PPE) was $0.84 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.94 Mil.
Selling, General & Admin. Expense(SGA) was $24.99 Mil.
Total Current Liabilities was $15.25 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)|
|=||(3.082 / 45.729)||/||(6.699 / 89.579)|
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)|
|=||(0.746 / 89.579)||/||(3.389 / 45.729)|
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 - (20.963 + 1.025) / 25.373)||/||(1 - (41.272 + 0.84) / 42.681)|
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))|
|=||(10.938 / (10.938 + 0.84))||/||(11.701 / (11.701 + 1.025))|
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)|
|=||(17.213 / 45.729)||/||(24.987 / 89.579)|
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 + 9.399) / 25.373)||/||((0 + 15.252) / 42.681)|
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|
|=||(-15.013 - 0.247||-||-12.357)||/||25.373|
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 Company has a M-score of 0.38 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 Company Annual Data
Majesco Entertainment Company Quarterly Data