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GuruFocus has detected 5 Warning Signs with Daktronics Inc $DAKT.
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Daktronics Inc (NAS:DAKT)
Beneish M-Score
-2.86 (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.

Daktronics Inc has a M-score of -2.86 suggests that the company is not a manipulator.

DAKT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.77   Max: -1.37
Current: -2.86

-3.77
-1.37

During the past 13 years, the highest Beneish M-Score of Daktronics Inc was -1.37. The lowest was -3.77. And the median was -2.56.


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 Daktronics 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 * 0.9898+0.528 * 0.9389+0.404 * 1.9607+0.892 * 0.9856+0.115 * 0.8493
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0936+4.679 * -0.1435-0.327 * 1.0406
=-2.86

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $71.6 Mil.
Revenue was 115.719 + 169.992 + 157.146 + 138.463 = $581.3 Mil.
Gross Profit was 23.316 + 44.308 + 39.067 + 27.976 = $134.7 Mil.
Total Current Assets was $251.8 Mil.
Total Assets was $348.1 Mil.
Property, Plant and Equipment(Net PPE) was $67.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $96.4 Mil.
Total Current Liabilities was $120.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -5.127 + 9.021 + 5.539 + -2.93 = $6.5 Mil.
Non Operating Income was -0.305 + 0.149 + -0.094 + 0.539 = $0.3 Mil.
Cash Flow from Operations was 30.373 + 8.408 + 6.598 + 10.775 = $56.2 Mil.
Accounts Receivable was $73.4 Mil.
Revenue was 123.816 + 157.668 + 150.221 + 158.086 = $589.8 Mil.
Gross Profit was 22.029 + 35.513 + 35.501 + 35.237 = $128.3 Mil.
Total Current Assets was $259.8 Mil.
Total Assets was $348.1 Mil.
Property, Plant and Equipment(Net PPE) was $73.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.3 Mil.
Selling, General & Admin. Expense(SGA) was $89.4 Mil.
Total Current Liabilities was $115.5 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)
=(71.637 / 581.32) / (73.43 / 589.791)
=0.12323161 / 0.12450173
=0.9898

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)
=(128.28 / 589.791) / (134.667 / 581.32)
=0.21750078 / 0.23165726
=0.9389

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 - (251.832 + 66.951) / 348.106) / (1 - (259.803 + 73.378) / 348.138)
=0.08423584 / 0.04296285
=1.9607

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
=581.32 / 589.791
=0.9856

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))
=(16.305 / (16.305 + 73.378)) / (18.235 / (18.235 + 66.951))
=0.18180703 / 0.214061
=0.8493

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)
=(96.381 / 581.32) / (89.414 / 589.791)
=0.16579681 / 0.15160286
=1.0936

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 + 120.181) / 348.106) / ((0 + 115.504) / 348.138)
=0.34524254 / 0.33177648
=1.0406

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
=(6.503 - 0.289 - 56.154) / 348.106
=-0.1435

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.

Daktronics Inc has a M-score of -2.86 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.

Daktronics Inc Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 0.890.91780.63181.08261.22160.97740.89231.22530.87831.0362
GMI 1.04050.98941.1041.11250.95281.08930.89711.00621.09381.1059
AQI 1.48890.88920.82570.81690.85870.95560.94020.90860.86972.0656
SGI 1.40031.15351.16210.67711.12331.10831.05881.06491.11590.9257
DEPI 1.31130.77580.82920.99480.98351.07621.0091.11171.06650.9103
SGAI 1.03521.03630.88581.28770.8180.98440.95050.9580.97141.1165
LVGI 1.12890.89870.87470.90061.21161.0331.03921.16370.89570.9278
TATA 0.0415-0.1177-0.0598-0.157-0.0853-0.0362-0.0849-0.0382-0.0838-0.0317
M-score -1.82-3.02-2.93-3.46-2.69-2.54-3.01-2.46-2.84-2.18

Daktronics Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.29011.07620.87830.92520.96650.94231.03621.08450.98530.9898
GMI 1.00521.04571.09371.13181.10671.10741.10591.0560.99350.9389
AQI 0.87580.84880.86970.99660.93010.96412.06561.8581.83021.9607
SGI 1.10351.09971.11591.03390.98770.99280.92570.96261.00910.9856
DEPI 1.13981.09411.06651.02280.97530.9590.91030.85290.85210.8493
SGAI 0.95430.9740.97141.01621.03971.03321.11651.09941.06091.0936
LVGI 1.06891.0180.89570.95120.88140.95190.92781.03611.1341.0406
TATA -0.0511-0.0145-0.0838-0.00520.0119-0.0534-0.0317-0.0719-0.0788-0.1435
M-score -2.41-2.42-2.84-2.46-2.41-2.74-2.18-2.44-2.59-2.86
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