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ExlService Holdings Inc (NAS:EXLS)
Beneish M-Score
-2.83 (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 -2.83 suggests that the company is not a manipulator.

EXLS' s 10-Year Beneish M-Score Range
Min: -3.3   Max: -1.99
Current: -2.83

-3.3
-1.99

During the past 13 years, the highest Beneish M-Score of ExlService Holdings Inc was -1.99. The lowest was -3.30. And the median was -2.51.


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 * 0.9164+0.528 * 0.9915+0.404 * 0.8435+0.892 * 1.0555+0.115 * 1.1974
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0018+4.679 * -0.0643-0.327 * 0.927
=-2.83

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $73.7 Mil.
Revenue was 119.738 + 121.797 + 124.123 + 122.315 = $488.0 Mil.
Gross Profit was 38.479 + 46.875 + 52.073 + 50.266 = $187.7 Mil.
Total Current Assets was $272.9 Mil.
Total Assets was $494.3 Mil.
Property, Plant and Equipment(Net PPE) was $46.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.1 Mil.
Selling, General & Admin. Expense(SGA) was $98.5 Mil.
Total Current Liabilities was $69.6 Mil.
Long-Term Debt was $1.0 Mil.
Net Income was 7.762 + 11.147 + 15.859 + 13.24 = $48.0 Mil.
Non Operating Income was -0.137 + -0.833 + -1.864 + -2.508 = $-5.3 Mil.
Cash Flow from Operations was 22.788 + 4.965 + 38.562 + 18.829 = $85.1 Mil.
Accounts Receivable was $76.2 Mil.
Revenue was 116.008 + 116.006 + 117.653 + 112.639 = $462.3 Mil.
Gross Profit was 42.078 + 43.093 + 47.144 + 43.989 = $176.3 Mil.
Total Current Assets was $217.1 Mil.
Total Assets was $436.3 Mil.
Property, Plant and Equipment(Net PPE) was $35.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.1 Mil.
Selling, General & Admin. Expense(SGA) was $93.2 Mil.
Total Current Liabilities was $65.3 Mil.
Long-Term Debt was $2.0 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)
=(73.721 / 487.973) / (76.214 / 462.306)
=0.15107598 / 0.16485618
=0.9164

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)
=(46.875 / 462.306) / (38.479 / 487.973)
=0.3813578 / 0.38463808
=0.9915

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 - (272.862 + 45.978) / 494.273) / (1 - (217.07 + 35.656) / 436.324)
=0.35493138 / 0.42078364
=0.8435

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
=487.973 / 462.306
=1.0555

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))
=(26.098 / (26.098 + 35.656)) / (25.078 / (25.078 + 45.978))
=0.4226123 / 0.3529329
=1.1974

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)
=(98.543 / 487.973) / (93.19 / 462.306)
=0.20194355 / 0.20157645
=1.0018

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)
=((0.977 + 69.619) / 494.273) / ((1.969 + 65.257) / 436.324)
=0.14282795 / 0.15407358
=0.927

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
=(48.008 - -5.342 - 85.144) / 494.273
=-0.0643

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 -2.83 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 1.15191.11060.95520.85920.98280.9530.88331.0780.9558
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 -2.71-1.31-2.05-2.91-2.59-2.12-2.40-2.40-2.79

ExlService Holdings Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.89820.79260.86421.0781.12421.111.02260.95580.9520.9164
GMI 1.03471.03531.01721.00950.98471.00250.99370.98540.98180.9915
AQI 1.40810.88840.83750.96590.98081.00241.02560.88320.85680.8435
SGI 1.44651.40491.30441.22851.15831.11331.10311.08021.06581.0555
DEPI 0.9040.76820.89170.90490.88760.90240.850.92871.1061.1974
SGAI 0.90410.90110.91730.94170.97830.99531.041.00240.97781.0018
LVGI 1.08480.61930.79170.8720.88720.92910.96230.94570.97160.927
TATA -0.0529-0.0306-0.0407-0.0492-0.0496-0.0613-0.0425-0.0641-0.0541-0.0643
M-score -2.26-2.36-2.51-2.40-2.44-2.55-2.57-2.79-2.76-2.83
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