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ExlService Holdings Inc (NAS:EXLS)
Beneish M-Score
-2.79 (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.

ExlService Holdings Inc has a M-score of -2.79 suggests that the company is not a manipulator.

EXLS' s 10-Year Beneish M-Score Range
Min: -3.34   Max: -1.49
Current: -2.79

-3.34
-1.49

During the past 13 years, the highest Beneish M-Score of ExlService Holdings Inc was -1.49. The lowest was -3.34. And the median was -2.50.


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 ExlService Holdings 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 * 0.9882+0.528 * 1.0796+0.404 * 0.9099+0.892 * 1.0342+0.115 * 1.2254
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9833+4.679 * -0.0799-0.327 * 0.9781
=-2.79

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $75.7 Mil.
Revenue was 122.457 + 119.738 + 121.797 + 124.123 = $488.1 Mil.
Gross Profit was 37.474 + 38.479 + 46.875 + 52.073 = $174.9 Mil.
Total Current Assets was $273.1 Mil.
Total Assets was $498.6 Mil.
Property, Plant and Equipment(Net PPE) was $45.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.1 Mil.
Selling, General & Admin. Expense(SGA) was $98.8 Mil.
Total Current Liabilities was $74.1 Mil.
Long-Term Debt was $0.9 Mil.
Net Income was 6.075 + 7.762 + 11.147 + 15.859 = $40.8 Mil.
Non Operating Income was 0.642 + -0.137 + -0.833 + -1.864 = $-2.2 Mil.
Cash Flow from Operations was 16.552 + 22.788 + 4.965 + 38.562 = $82.9 Mil.
Accounts Receivable was $74.1 Mil.
Revenue was 122.315 + 116.008 + 116.006 + 117.653 = $472.0 Mil.
Gross Profit was 50.266 + 42.078 + 43.093 + 47.144 = $182.6 Mil.
Total Current Assets was $237.6 Mil.
Total Assets was $446.8 Mil.
Property, Plant and Equipment(Net PPE) was $31.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.7 Mil.
Selling, General & Admin. Expense(SGA) was $97.2 Mil.
Total Current Liabilities was $67.1 Mil.
Long-Term Debt was $1.5 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)
=(75.685 / 488.115) / (74.054 / 471.982)
=0.15505567 / 0.15690005
=0.9882

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)
=(38.479 / 471.982) / (37.474 / 488.115)
=0.3868389 / 0.35831925
=1.0796

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 - (273.084 + 45.307) / 498.558) / (1 - (237.647 + 31.69) / 446.768)
=0.36137621 / 0.39714348
=0.9099

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
=488.115 / 471.982
=1.0342

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))
=(25.734 / (25.734 + 31.69)) / (26.123 / (26.123 + 45.307))
=0.44814015 / 0.36571469
=1.2254

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)
=(98.828 / 488.115) / (97.188 / 471.982)
=0.20246868 / 0.20591463
=0.9833

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)
=((0.85 + 74.063) / 498.558) / ((1.533 + 67.099) / 446.768)
=0.15025935 / 0.15361888
=0.9781

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
=(40.843 - -2.192 - 82.867) / 498.558
=-0.0799

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.

ExlService Holdings Inc has a M-score of -2.79 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.

ExlService Holdings Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.14731.11310.9720.8590.98360.95790.88331.0780.9558
GMI 1.00940.90541.07010.96480.89231.06431.02981.00950.9854
AQI 0.93832.40881.10330.98121.26651.78871.41040.96590.8832
SGI 1.2231.64661.47731.01011.05111.32331.42651.22851.0802
DEPI 0.85910.81760.9160.92091.24451.02970.88950.90490.9287
SGAI 0.97050.9761.08811.09311.02630.97530.90420.94160.999
LVGI 1.03140.56060.75151.07590.83221.08481.21230.8720.9457
TATA -0.1123-0.0329-0.0192-0.0504-0.0565-0.0462-0.0658-0.0492-0.0641
M-score -2.71-1.31-2.03-2.91-2.58-2.11-2.40-2.40-2.79

ExlService Holdings Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.79260.86421.0781.12421.111.02260.95580.9520.91640.9882
GMI 1.03531.01721.00950.98471.00250.99370.98540.98180.99151.0796
AQI 0.88840.83750.96590.98081.00241.02560.88320.85680.84350.9099
SGI 1.40491.30441.22851.15831.11331.10311.08021.06581.05551.0342
DEPI 0.76820.89170.90490.88760.90240.850.92871.1061.19741.2254
SGAI 0.90110.91730.94170.97830.99531.041.00240.97781.00180.9833
LVGI 0.61930.79170.8720.88720.92910.96230.94570.97160.9270.9781
TATA -0.0306-0.0407-0.0492-0.0496-0.0613-0.0425-0.0641-0.0541-0.0643-0.0799
M-score -2.36-2.51-2.40-2.44-2.55-2.57-2.79-2.76-2.83-2.79
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