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ExlService Holdings Inc (NAS:EXLS)
Beneish M-Score
-2.74 (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 -2.74 suggests that the company is not a manipulator.

EXLS' s 10-Year Beneish M-Score Range
Min: -3.31   Max: -1.49
Current: -2.74

-3.31
-1.49

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 -2.52.


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 * 1.068+0.528 * 1.2088+0.404 * 1.1931+0.892 * 1.0759+0.115 * 0.9547
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0632+4.679 * -0.054-0.327 * 1.9532
=-2.74

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $89.3 Mil.
Revenue was 143.51 + 135.286 + 122.457 + 119.738 = $521.0 Mil.
Gross Profit was 50.385 + 43.915 + 37.474 + 38.479 = $170.3 Mil.
Total Current Assets was $295.1 Mil.
Total Assets was $611.0 Mil.
Property, Plant and Equipment(Net PPE) was $47.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.7 Mil.
Selling, General & Admin. Expense(SGA) was $109.5 Mil.
Total Current Liabilities was $84.9 Mil.
Long-Term Debt was $75.4 Mil.
Net Income was 9.567 + 7.46 + 6.075 + 7.762 = $30.9 Mil.
Non Operating Income was 1.193 + 0.323 + 0.642 + -0.137 = $2.0 Mil.
Cash Flow from Operations was 0.137 + 22.354 + 16.552 + 22.788 = $61.8 Mil.
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.



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)
=(89.323 / 520.991) / (77.737 / 484.243)
=0.17144826 / 0.16053304
=1.068

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)
=(43.915 / 484.243) / (50.385 / 520.991)
=0.39503307 / 0.32678684
=1.2088

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 - (295.088 + 47.467) / 611.018) / (1 - (257.947 + 44.031) / 478.011)
=0.43937003 / 0.3682614
=1.1931

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
=520.991 / 484.243
=1.0759

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))
=(24.761 / (24.761 + 44.031)) / (28.725 / (28.725 + 47.467))
=0.35994011 / 0.37700808
=0.9547

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)
=(109.507 / 520.991) / (95.729 / 484.243)
=0.21018981 / 0.19768794
=1.0632

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)
=((75.424 + 84.906) / 611.018) / ((1.222 + 62.994) / 478.011)
=0.26239816 / 0.13434
=1.9532

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
=(30.864 - 2.021 - 61.831) / 611.018
=-0.054

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 -2.74 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 1.14731.11310.9720.8590.98360.95790.88331.05920.97281.0102
GMI 1.00940.90541.07010.96480.89231.06431.02981.00950.98541.1735
AQI 0.85622.63521.10630.98021.37421.64871.41040.97990.87061.0352
SGI 1.2231.64661.47731.01011.05111.32331.42651.22851.08021.0435
DEPI 0.85910.81760.89081.21520.96981.02970.88950.89280.94131.097
SGAI 0.97050.9761.08811.09311.02630.97530.90420.94160.9991.054
LVGI 1.01510.5620.88840.92250.83221.08481.21230.8720.94571.4766
TATA -0.112-0.033-0.0186-0.0504-0.0565-0.0462-0.0658-0.0492-0.0641-0.0596
M-score -2.74-1.22-2.08-2.83-2.57-2.17-2.40-2.42-2.78-2.76

ExlService Holdings Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.05921.12421.111.02260.97280.9520.91640.98821.01021.068
GMI 1.00950.98471.00250.99370.98540.98180.99151.07961.17351.2088
AQI 0.97990.98081.00241.02560.87060.85680.84350.90991.03521.1931
SGI 1.22851.15831.11331.10311.08021.06581.05551.03421.04351.0759
DEPI 0.89280.88760.90240.850.94131.1061.19741.22541.0970.9547
SGAI 0.94170.97490.99181.03650.9990.98131.00530.98661.0541.0632
LVGI 0.8720.88720.92910.96230.94570.97160.9270.97811.47661.9532
TATA -0.0492-0.0496-0.0613-0.0425-0.0641-0.0545-0.0647-0.0803-0.06-0.054
M-score -2.42-2.44-2.55-2.57-2.78-2.76-2.83-2.80-2.76-2.74
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