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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.
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.
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|
* 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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(38.479 / 471.982)||/||(37.474 / 488.115)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(40.843 - -2.192||-||82.867)||/||498.558|
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.
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
ExlService Holdings Inc Annual Data
ExlService Holdings Inc Quarterly Data