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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.
During the past 13 years, the highest Beneish M-Score of ExlService Holdings Inc was -1.49. The lowest was -3.31. And the median was -2.53.
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 * 1.1199||+||0.528 * 1.1459||+||0.404 * 1.2118||+||0.892 * 1.1412||+||0.115 * 0.9174|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0283||+||4.679 * -0.0558||-||0.327 * 1.7707|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $94.2 Mil.|
Revenue was 155.621 + 143.51 + 135.286 + 122.457 = $556.9 Mil.
Gross Profit was 55.143 + 50.385 + 43.915 + 37.474 = $186.9 Mil.
Total Current Assets was $301.6 Mil.
Total Assets was $613.7 Mil.
Property, Plant and Equipment(Net PPE) was $48.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $30.1 Mil.
Selling, General & Admin. Expense(SGA) was $115.6 Mil.
Total Current Liabilities was $94.9 Mil.
Long-Term Debt was $60.3 Mil.
Net Income was 12.074 + 9.567 + 7.46 + 6.075 = $35.2 Mil.
Non Operating Income was 1.207 + 1.193 + 0.323 + 0.642 = $3.4 Mil.
Cash Flow from Operations was 27.03 + 0.137 + 22.354 + 16.552 = $66.1 Mil.
|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.
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)|
|=||(94.216 / 556.874)||/||(73.721 / 487.973)|
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)|
|=||(50.385 / 487.973)||/||(55.143 / 556.874)|
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 - (301.608 + 48.152) / 613.718)||/||(1 - (272.862 + 45.978) / 494.273)|
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))|
|=||(25.078 / (25.078 + 45.978))||/||(30.107 / (30.107 + 48.152))|
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)|
|=||(115.638 / 556.874)||/||(98.543 / 487.973)|
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)|
|=||((60.323 + 94.892) / 613.718)||/||((0.977 + 69.619) / 494.273)|
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|
|=||(35.176 - 3.365||-||66.073)||/||613.718|
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 -2.61 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