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GuruFocus has detected 2 Warning Signs with CommVault Systems Inc $CVLT.
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CommVault Systems Inc (NAS:CVLT)
Beneish M-Score
-3.07 (As of Today)

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.

CommVault Systems Inc has a M-score of -3.07 suggests that the company is not a manipulator.

CVLT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.32   Max: 19.1
Current: -3.07

-3.32
19.1

During the past 13 years, the highest Beneish M-Score of CommVault Systems Inc was 19.10. The lowest was -3.32. And the median was -2.90.


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 CommVault Systems Inc 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 * 0.9303+0.528 * 0.9902+0.404 * 1.0664+0.892 * 1.0867+0.115 * 1.065
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9826+4.679 * -0.1357-0.327 * 0.9937
=-3.07

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $115.9 Mil.
Revenue was 165.841 + 159.333 + 152.413 + 159.565 = $637.2 Mil.
Gross Profit was 144.675 + 137.676 + 131.418 + 138.768 = $552.5 Mil.
Total Current Assets was $568.8 Mil.
Total Assets was $769.7 Mil.
Property, Plant and Equipment(Net PPE) was $132.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.2 Mil.
Selling, General & Admin. Expense(SGA) was $457.6 Mil.
Total Current Liabilities was $267.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -0.042 + -0.562 + -2.044 + 5.794 = $3.1 Mil.
Non Operating Income was -0.3 + -0.158 + -0.086 + -0.083 = $-0.6 Mil.
Cash Flow from Operations was 26.768 + 20.239 + 24.047 + 37.179 = $108.2 Mil.
Accounts Receivable was $114.6 Mil.
Revenue was 155.696 + 140.742 + 139.123 + 150.735 = $586.3 Mil.
Gross Profit was 135.267 + 119.803 + 118.576 + 129.821 = $503.5 Mil.
Total Current Assets was $532.7 Mil.
Total Assets was $730.6 Mil.
Property, Plant and Equipment(Net PPE) was $137.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.3 Mil.
Selling, General & Admin. Expense(SGA) was $428.5 Mil.
Total Current Liabilities was $255.2 Mil.
Long-Term Debt was $0.0 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)
=(115.851 / 637.152) / (114.591 / 586.296)
=0.18182631 / 0.19544906
=0.9303

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)
=(503.467 / 586.296) / (552.537 / 637.152)
=0.85872494 / 0.86719809
=0.9902

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 - (568.764 + 132.862) / 769.716) / (1 - (532.749 + 137.21) / 730.563)
=0.0884612 / 0.0829552
=1.0664

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
=637.152 / 586.296
=1.0867

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))
=(11.323 / (11.323 + 137.21)) / (10.243 / (10.243 + 132.862))
=0.07623222 / 0.07157681
=1.065

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)
=(457.557 / 637.152) / (428.494 / 586.296)
=0.71812848 / 0.73084926
=0.9826

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 + 267.166) / 769.716) / ((0 + 255.181) / 730.563)
=0.34709685 / 0.34929363
=0.9937

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
=(3.146 - -0.627 - 108.233) / 769.716
=-0.1357

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.

CommVault Systems Inc has a M-score of -3.07 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 local exchange's currency.

CommVault Systems Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.87571.53080.84051.14111.0960.71021.02861.17880.95850.9837
GMI 1.00760.99140.99381.0010.99861.00120.99960.99511.00971.0045
AQI 19.34610.68860.83270.53920.7580.95520.71651.01921.40911.279
SGI 1.38031.31231.18261.15571.16141.29181.21941.18251.03620.9796
DEPI 0.87341.10070.94481.01810.95911.15131.73642.9051.07680.7974
SGAI 0.98931.03331.07060.96671.01951.01890.94060.9951.14041.0639
LVGI 0.72870.86961.02520.98251.00571.02720.8780.91811.12141.0257
TATA 0.2274-0.0677-0.1487-0.1358-0.0917-0.1573-0.0983-0.0729-0.1376-0.1178
M-score 6.30-2.11-3.26-3.02-2.79-3.23-2.70-2.24-3.01-2.99

CommVault Systems Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.02970.99540.95850.93920.89871.04970.98371.05551.13890.9303
GMI 1.00021.00541.00971.01091.01331.01081.00450.9990.99160.9902
AQI 1.16821.22581.40910.84520.96111.66131.2791.90021.76271.0664
SGI 1.13111.08071.03620.98250.95070.95550.97961.02421.07431.0867
DEPI 1.9071.44521.07680.83880.68530.72120.79740.91871.03871.065
SGAI 1.04811.09831.14041.17481.16031.11161.06391.01270.98060.9826
LVGI 1.07291.18331.12140.97051.03870.97381.02571.05370.98770.9937
TATA -0.1203-0.1314-0.1376-0.1375-0.1317-0.1171-0.1178-0.1191-0.1159-0.1357
M-score -2.76-2.96-3.01-3.29-3.32-2.79-2.99-2.63-2.51-3.07
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