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Majesco Entertainment Company (NAS:COOL)
Beneish M-Score
0.38 (As of Today)

Warning Sign:

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.

COOL' s 10-Year Beneish M-Score Range
Min: -15.56   Max: 24.22
Current: 0.38

-15.56
24.22

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.


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 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
=0.38

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

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

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)
=(3.082 / 45.729) / (6.699 / 89.579)
=0.06739706 / 0.07478315
=0.9012

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)
=(0.746 / 89.579) / (3.389 / 45.729)
=0.30869958 / 0.18380021
=1.6795

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 - (20.963 + 1.025) / 25.373) / (1 - (41.272 + 0.84) / 42.681)
=0.13340953 / 0.01333146
=10.0071

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
=45.729 / 89.579
=0.5105

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))
=0.92868059 / 0.91945623
=1.01

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)
=0.37641322 / 0.27893814
=1.3495

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)
=0.37043314 / 0.3573487
=1.0366

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
=(-15.013 - 0.247 - -12.357) / 25.373
=-0.1144

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.


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 Company 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 Company Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
DSRI 1.41580.85420.91850.3033.81560.56860.46880.93410.56240.9012
GMI 0.66960.90391.0231.11071.10341.10671.24791.28841.27781.6795
AQI 1.73661.47391.39350.58842.98914.58955.08275.31587.947810.0071
SGI 1.65621.50681.21631.05931.05580.62640.48770.48720.35730.5105
DEPI 1.09471.0270.98430.89720.89540.99111.01291.01811.06011.01
SGAI 0.91930.82281.05671.16591.13581.4831.48891.36021.64831.3495
LVGI 0.87210.97281.01011.04780.77990.83480.90320.92091.15431.0366
TATA 0.005-0.0701-0.1371-0.1121-0.0692-0.2771-0.1445-0.098-0.2135-0.1144
M-score -1.30-2.31-2.85-3.760.73-3.03-2.37-1.59-1.660.38
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