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ExlService Holdings Inc (NAS:EXLS)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

EXLS' s 10-Year Beneish M-Score Range
Min: -2.83   Max: -2.17
Current: -2.76

-2.83
-2.17

During the past 13 years, the highest Beneish M-Score of ExlService Holdings Inc was -2.17. The lowest was -2.83. 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 * 1.0102+0.528 * 1.1735+0.404 * 1.0352+0.892 * 1.0435+0.115 * 1.097
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.054+4.679 * -0.0596-0.327 * 1.4766
=-2.76

* 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 $80.2 Mil.
Revenue was 135.286 + 122.457 + 119.738 + 121.797 = $499.3 Mil.
Gross Profit was 43.915 + 37.474 + 38.479 + 46.875 = $166.7 Mil.
Total Current Assets was $302.4 Mil.
Total Assets was $573.6 Mil.
Property, Plant and Equipment(Net PPE) was $45.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.0 Mil.
Selling, General & Admin. Expense(SGA) was $104.7 Mil.
Total Current Liabilities was $91.0 Mil.
Long-Term Debt was $50.6 Mil.
Net Income was 7.46 + 6.075 + 7.762 + 11.147 = $32.4 Mil.
Non Operating Income was 0.323 + 0.642 + -0.137 + -0.833 = $-0.0 Mil.
Cash Flow from Operations was 22.354 + 16.552 + 22.788 + 4.965 = $66.7 Mil.
Accounts Receivable was $76.1 Mil.
Revenue was 124.123 + 122.315 + 116.008 + 116.006 = $478.5 Mil.
Gross Profit was 52.073 + 50.266 + 42.078 + 43.093 = $187.5 Mil.
Total Current Assets was $252.6 Mil.
Total Assets was $463.4 Mil.
Property, Plant and Equipment(Net PPE) was $34.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.9 Mil.
Selling, General & Admin. Expense(SGA) was $95.2 Mil.
Total Current Liabilities was $76.1 Mil.
Long-Term Debt was $1.4 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)
=(80.244 / 499.278) / (76.121 / 478.452)
=0.16072008 / 0.15909851
=1.0102

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)
=(37.474 / 478.452) / (43.915 / 499.278)
=0.39190974 / 0.33396825
=1.1735

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 - (302.391 + 45.369) / 573.556) / (1 - (252.627 + 34.564) / 463.432)
=0.39367734 / 0.38029528
=1.0352

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
=499.278 / 478.452
=1.0435

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))
=(24.917 / (24.917 + 34.564)) / (28.028 / (28.028 + 45.369))
=0.41890688 / 0.38186847
=1.097

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)
=(104.675 / 499.278) / (95.173 / 478.452)
=0.20965274 / 0.1989186
=1.054

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)
=((50.56 + 90.968) / 573.556) / ((1.371 + 76.075) / 463.432)
=0.24675533 / 0.16711405
=1.4766

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
=(32.444 - -0.005 - 66.659) / 573.556
=-0.0596

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 -2.76 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.11310.9720.8590.98360.95790.88331.05920.97281.0102
GMI 0.90541.07010.96480.89231.06431.02981.00950.98541.1735
AQI 2.63521.10630.98021.37421.64871.41040.97990.87061.0352
SGI 1.64661.47731.01011.05111.32331.42651.22851.08021.0435
DEPI 0.81760.89081.21520.96981.02970.88950.89280.94131.097
SGAI 0.9761.08811.09311.02630.97530.90420.94160.9991.054
LVGI 0.5620.88840.92250.83221.08481.21230.8720.94571.4766
TATA -0.033-0.0186-0.0504-0.0565-0.0462-0.0658-0.0492-0.0641-0.0596
M-score -1.22-2.08-2.83-2.57-2.17-2.40-2.42-2.78-2.76

ExlService Holdings Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.86421.05921.12421.111.02260.97280.9520.91640.98821.0102
GMI 1.01721.00950.98471.00250.99370.98540.98180.99151.07961.1735
AQI 0.83750.97990.98081.00241.02560.87060.85680.84350.90991.0352
SGI 1.30441.22851.15831.11331.10311.08021.06581.05551.03421.0435
DEPI 0.89170.89280.88760.90240.850.94131.1061.19741.22541.097
SGAI 0.91730.94170.97490.99181.03650.9990.98131.00530.98661.054
LVGI 0.79170.8720.88720.92910.96230.94570.97160.9270.97811.4766
TATA -0.0407-0.0492-0.0496-0.0613-0.0425-0.0641-0.0541-0.0643-0.0799-0.0596
M-score -2.51-2.42-2.44-2.55-2.57-2.78-2.76-2.83-2.79-2.76
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