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Majesco Entertainment Co (NAS:COOL)
Beneish M-Score
-2.90 (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 -2.90 suggests that the company is not a manipulator.

COOL' s 10-Year Beneish M-Score Range
Min: -15.56   Max: 24.22
Current: -2.9

-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 * 1.4198+0.528 * 1.821+0.404 * 5.3117+0.892 * 0.5986+0.115 * 0.961
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3622+4.679 * -0.5184-0.327 * 1.4123
=-2.90

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $0.52 Mil.
Revenue was 2.911 + 3.24 + 21.934 + 10.077 = $38.16 Mil.
Gross Profit was 1.141 + 0.061 + 3.389 + 0.746 = $5.34 Mil.
Total Current Assets was $15.73 Mil.
Total Assets was $18.08 Mil.
Property, Plant and Equipment(Net PPE) was $0.65 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.55 Mil.
Selling, General & Admin. Expense(SGA) was $16.00 Mil.
Total Current Liabilities was $7.82 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -2.727 + -3.585 + -4.512 + -4.586 = $-15.41 Mil.
Non Operating Income was -0.335 + -0.166 + 0.247 + 0 = $-0.25 Mil.
Cash Flow from Operations was 0.222 + -1.36 + 1.023 + -5.668 = $-5.78 Mil.
Accounts Receivable was $0.61 Mil.
Revenue was 3.998 + 9.72 + 23.472 + 26.562 = $63.75 Mil.
Gross Profit was 1.235 + 3.035 + 7.152 + 4.814 = $16.24 Mil.
Total Current Assets was $30.61 Mil.
Total Assets was $32.05 Mil.
Property, Plant and Equipment(Net PPE) was $0.87 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.63 Mil.
Selling, General & Admin. Expense(SGA) was $19.63 Mil.
Total Current Liabilities was $9.81 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)
=(0.521 / 38.162) / (0.613 / 63.752)
=0.01365232 / 0.00961538
=1.4198

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)
=(0.061 / 63.752) / (1.141 / 38.162)
=0.25467436 / 0.13985116
=1.821

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 - (15.726 + 0.65) / 18.081) / (1 - (30.611 + 0.871) / 32.051)
=0.09429788 / 0.01775296
=5.3117

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
=38.162 / 63.752
=0.5986

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))
=(9.626 / (9.626 + 0.871)) / (13.551 / (13.551 + 0.65))
=0.91702391 / 0.95422858
=0.961

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)
=(16.002 / 38.162) / (19.625 / 63.752)
=0.41931765 / 0.30783348
=1.3622

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 + 7.819) / 18.081) / ((0 + 9.814) / 32.051)
=0.4324429 / 0.30619949
=1.4123

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
=(-15.41 - -0.254 - -5.783) / 18.081
=-0.5184

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 -2.90 suggests that the company will not 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

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 0.91850.3033.81560.56860.46880.93410.56240.90120.90361.4198
GMI 1.0231.11071.10341.10671.24791.28841.27781.67951.94231.821
AQI 1.39350.58842.98914.58955.08275.31587.947810.007110.50535.3117
SGI 1.21631.05931.05580.62640.48770.48720.35730.51050.56970.5986
DEPI 0.98430.89720.89540.99111.01291.01811.06011.010.9880.961
SGAI 1.05671.16591.13581.4831.48891.36021.64831.34951.35481.3622
LVGI 1.01011.04780.77990.83480.90320.92091.15431.03661.1881.4123
TATA -0.1371-0.1121-0.0692-0.2771-0.1445-0.098-0.2135-0.1144-0.1859-0.5184
M-score -2.85-3.760.73-3.03-2.37-1.59-1.660.380.39-2.90
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