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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 24.30. The lowest was -2660.06. And the median was -2.29.
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 *|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jul16) TTM:||Last Year (Jul15) TTM:|
|Accounts Receivable was $0.18 Mil.|
Revenue was 0.315 + 0.412 + 0.591 + 0.426 = $1.74 Mil.
Gross Profit was 0.223 + 0.287 + 0.533 + 0.392 = $1.44 Mil.
Total Current Assets was $7.08 Mil.
Total Assets was $7.11 Mil.
Property, Plant and Equipment(Net PPE) was $0.02 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.19 Mil.
Selling, General & Admin. Expense(SGA) was $6.52 Mil.
Total Current Liabilities was $1.61 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -2.486 + -1.101 + -0.647 + -0.79 = $-5.02 Mil.
Non Operating Income was 0.169 + -0.02 + 0 + 0.069 = $0.22 Mil.
Cash Flow from Operations was -0.544 + -0.611 + -0.398 + -0.758 = $-2.31 Mil.
|Accounts Receivable was $0.25 Mil.
Revenue was 1.091 + 1.705 + 3.471 + 6.283 = $12.55 Mil.
Gross Profit was 0.724 + 0.797 + 1.357 + 1.114 = $3.99 Mil.
Total Current Assets was $9.30 Mil.
Total Assets was $9.35 Mil.
Property, Plant and Equipment(Net PPE) was $0.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.96 Mil.
Selling, General & Admin. Expense(SGA) was $9.71 Mil.
Total Current Liabilities was $2.53 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)|
|=||(0.176 / 1.744)||/||(0.245 / 12.55)|
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)|
|=||(3.992 / 12.55)||/||(1.435 / 1.744)|
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 - (7.083 + 0.024) / 7.107)||/||(1 - (9.301 + 0.048) / 9.349)|
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))|
|=||(1.955 / (1.955 + 0.048))||/||(0.191 / (0.191 + 0.024))|
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)|
|=||(6.519 / 1.744)||/||(9.708 / 12.55)|
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 + 1.607) / 7.107)||/||((0 + 2.533) / 9.349)|
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|
|=||(-5.024 - 0.218||-||-2.311)||/||7.107|
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