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Entropic Communications Inc (NAS:ENTR)
Beneish M-Score
0.00 (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.

Entropic Communications Inc has a M-score of -4.60 suggests that the company is not a manipulator.

During the past 11 years, the highest Beneish M-Score of Entropic Communications Inc was 0.00. The lowest was 0.00. And the median was 0.00.


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 Entropic Communications 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 * 1.2456+0.528 * 0.9856+0.404 * 0.5671+0.892 * 0.7388+0.115 * 0.9973
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3631+4.679 * -0.3515-0.327 * 1.6845
=-4.60

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $27.8 Mil.
Revenue was 42.586 + 43.178 + 50.2 + 55.655 = $191.6 Mil.
Gross Profit was 21.082 + 22.569 + 23.538 + 26.062 = $93.3 Mil.
Total Current Assets was $142.2 Mil.
Total Assets was $210.9 Mil.
Property, Plant and Equipment(Net PPE) was $17.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.4 Mil.
Selling, General & Admin. Expense(SGA) was $47.6 Mil.
Total Current Liabilities was $26.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -25.385 + -27.637 + -21.849 + -23.253 = $-98.1 Mil.
Non Operating Income was 0.432 + 0.176 + 0.192 + 0.081 = $0.9 Mil.
Cash Flow from Operations was -1.942 + -2 + -11.625 + -9.295 = $-24.9 Mil.
Accounts Receivable was $30.2 Mil.
Revenue was 57.931 + 56.376 + 70.612 + 74.457 = $259.4 Mil.
Gross Profit was 27.794 + 27.513 + 34.256 + 34.839 = $124.4 Mil.
Total Current Assets was $150.7 Mil.
Total Assets was $295.3 Mil.
Property, Plant and Equipment(Net PPE) was $18.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.0 Mil.
Selling, General & Admin. Expense(SGA) was $47.3 Mil.
Total Current Liabilities was $22.0 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)
=(27.795 / 191.619) / (30.204 / 259.376)
=0.14505347 / 0.11644871
=1.2456

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)
=(22.569 / 259.376) / (21.082 / 191.619)
=0.47962032 / 0.48664798
=0.9856

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 - (142.24 + 17.413) / 210.915) / (1 - (150.717 + 17.994) / 295.26)
=0.24304578 / 0.42860191
=0.5671

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
=191.619 / 259.376
=0.7388

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))
=(19.97 / (19.97 + 17.994)) / (19.434 / (19.434 + 17.413))
=0.52602465 / 0.52742421
=0.9973

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)
=(47.629 / 191.619) / (47.297 / 259.376)
=0.24856095 / 0.18234918
=1.3631

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 + 26.468) / 210.915) / ((0 + 21.996) / 295.26)
=0.12549131 / 0.07449705
=1.6845

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
=(-98.124 - 0.881 - -24.862) / 210.915
=-0.3515

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.

Entropic Communications Inc has a M-score of -4.60 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.

Entropic Communications Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.40411.1120.47681.39570.65251.24021.20880.89511.2456
GMI 1.87070.66130.8290.90080.94930.96741.08171.0630.9856
AQI 1.674623.91380.08120.51156.8582.59861.08361.00120.5671
SGI 11.15112.9551.19170.79641.80761.14461.33680.80630.7388
DEPI 1.28870.61270.89631.56340.94411.1550.63790.83730.9973
SGAI 0.13811.02171.27921.07420.6760.92571.18211.1551.3631
LVGI 2.23040.49080.95911.0620.70610.59631.33830.91071.6845
TATA 0.1146-0.1371-1.5834-0.17550.1134-0.0937-0.1044-0.2668-0.3515
M-score 7.077.92-10.71-3.340.94-1.78-2.58-3.98-4.60

Entropic Communications Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.20881.18360.8431.11840.89511.04871.00161.0151.24561.0201
GMI 1.08171.12621.11991.08521.0631.02261.01540.99930.98560.9883
AQI 1.08362.64121.21181.24591.00120.67010.90890.6330.56710.6034
SGI 1.33681.47691.29951.01040.80630.71380.67830.71090.73880.7676
DEPI 0.63790.55580.59860.79220.83730.91420.98511.14950.99731.0828
SGAI 1.18211.05650.90241.0051.1551.27791.47311.41331.36311.1969
LVGI 1.33831.31860.68010.72150.91071.09170.99581.25891.68451.299
TATA -0.1044-0.1071-0.2581-0.2468-0.2668-0.2814-0.1896-0.2767-0.3515-0.3103
M-score -2.58-1.82-3.34-3.31-3.98-4.22-3.76-4.31-4.60-4.41
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