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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 -0.72. The lowest was -3.31. And the median was -2.56.
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 * 0.9872||+||0.528 * 0.9438||+||0.404 * 0.9108||+||0.892 * 1.1975||+||0.115 * 0.9686|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9611||+||4.679 * -0.0673||-||0.327 * 0.8295|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $111.4 Mil.|
Revenue was 170.478 + 167.036 + 165.858 + 163.503 = $666.9 Mil.
Gross Profit was 58.452 + 58.657 + 59.742 + 60.305 = $237.2 Mil.
Total Current Assets was $343.8 Mil.
Total Assets was $646.9 Mil.
Property, Plant and Equipment(Net PPE) was $49.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $32.8 Mil.
Selling, General & Admin. Expense(SGA) was $133.1 Mil.
Total Current Liabilities was $100.5 Mil.
Long-Term Debt was $35.3 Mil.
Net Income was 16.375 + 13.82 + 14.762 + 15.162 = $60.1 Mil.
Non Operating Income was 5.229 + 1.426 + 0.332 + 0.233 = $7.2 Mil.
Cash Flow from Operations was 37.356 + -10.441 + 42.141 + 27.383 = $96.4 Mil.
|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.
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)|
|=||(111.383 / 666.875)||/||(94.216 / 556.874)|
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)|
|=||(186.917 / 556.874)||/||(237.156 / 666.875)|
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 - (343.772 + 49.708) / 646.897)||/||(1 - (301.608 + 48.152) / 613.718)|
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))|
|=||(30.107 / (30.107 + 48.152))||/||(32.754 / (32.754 + 49.708))|
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)|
|=||(133.087 / 666.875)||/||(115.638 / 556.874)|
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)|
|=||((35.252 + 100.461) / 646.897)||/||((60.323 + 94.892) / 613.718)|
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|
|=||(60.119 - 7.22||-||96.439)||/||646.897|
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 -2.64 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