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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: -3.26   Max: -2.01
Current: -2.76

-3.26
-2.01

During the past 13 years, the highest Beneish M-Score of ExlService Holdings Inc was -2.01. The lowest was -3.26. And the median was -2.49.


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 * 0.952+0.528 * 0.9818+0.404 * 0.8568+0.892 * 1.0658+0.115 * 1.106
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9813+4.679 * -0.0541-0.327 * 0.9716
=-2.76

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $77.7 Mil.
Revenue was 121.797 + 124.123 + 122.315 + 116.008 = $484.2 Mil.
Gross Profit was 46.875 + 52.073 + 50.266 + 42.078 = $191.3 Mil.
Total Current Assets was $257.9 Mil.
Total Assets was $478.0 Mil.
Property, Plant and Equipment(Net PPE) was $44.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.8 Mil.
Selling, General & Admin. Expense(SGA) was $95.7 Mil.
Total Current Liabilities was $63.0 Mil.
Long-Term Debt was $1.2 Mil.
Net Income was 11.147 + 15.859 + 13.24 + 9.236 = $49.5 Mil.
Non Operating Income was -0.833 + -1.864 + -2.508 + -0.569 = $-5.8 Mil.
Cash Flow from Operations was 4.965 + 38.562 + 18.829 + 18.779 = $81.1 Mil.
Accounts Receivable was $76.6 Mil.
Revenue was 116.006 + 117.653 + 112.639 + 108.03 = $454.3 Mil.
Gross Profit was 43.093 + 47.144 + 43.989 + 41.985 = $176.2 Mil.
Total Current Assets was $210.7 Mil.
Total Assets was $437.9 Mil.
Property, Plant and Equipment(Net PPE) was $39.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.8 Mil.
Selling, General & Admin. Expense(SGA) was $91.5 Mil.
Total Current Liabilities was $58.1 Mil.
Long-Term Debt was $2.4 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)
=(77.737 / 484.243) / (76.612 / 454.328)
=0.16053304 / 0.16862707
=0.952

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)
=(52.073 / 454.328) / (46.875 / 484.243)
=0.38784975 / 0.39503307
=0.9818

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 - (257.947 + 44.031) / 478.011) / (1 - (210.677 + 38.973) / 437.852)
=0.3682614 / 0.42983017
=0.8568

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
=484.243 / 454.328
=1.0658

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))
=(25.776 / (25.776 + 38.973)) / (24.761 / (24.761 + 44.031))
=0.39809109 / 0.35994011
=1.106

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)
=(95.729 / 484.243) / (91.529 / 454.328)
=0.19768794 / 0.20146018
=0.9813

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)
=((1.222 + 62.994) / 478.011) / ((2.399 + 58.139) / 437.852)
=0.13434 / 0.13826133
=0.9716

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
=(49.482 - -5.774 - 81.135) / 478.011
=-0.0541

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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.15191.11060.95520.85920.97770.95790.88331.05920.9728
GMI 1.00940.90541.07010.96480.89231.06431.02981.00950.9854
AQI 0.85622.63521.10630.98021.37421.64871.41040.97990.8706
SGI 1.2231.64661.47731.01011.05111.32331.42651.22851.0802
DEPI 0.85910.81760.89081.21520.96981.02970.88950.89280.9413
SGAI 0.97050.9761.08811.09311.02630.97530.90420.94160.999
LVGI 1.01510.5620.88840.92250.83221.08481.21230.8720.9457
TATA -0.112-0.033-0.0186-0.0504-0.0565-0.0462-0.0658-0.0492-0.0641
M-score -2.73-1.22-2.09-2.83-2.58-2.17-2.40-2.42-2.78

ExlService Holdings Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.88330.89820.79260.86421.05921.12421.111.02260.97280.952
GMI 1.02981.03471.03531.01721.00950.98471.00250.99370.98540.9818
AQI 1.41041.40810.88840.83750.97990.98081.00241.02560.87060.8568
SGI 1.42651.44651.40491.30441.22851.15831.11331.10311.08021.0658
DEPI 0.88950.9040.76820.89170.89280.88760.90240.850.94131.106
SGAI 0.90420.90410.90110.91730.94170.97490.99181.03650.9990.9813
LVGI 1.21231.08480.61930.79170.8720.88720.92910.96230.94570.9716
TATA -0.0658-0.0529-0.0306-0.0407-0.0492-0.0496-0.0613-0.0425-0.0641-0.0541
M-score -2.40-2.26-2.36-2.51-2.42-2.44-2.55-2.57-2.78-2.76
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