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ExlService Holdings, Inc. (NAS:EXLS)
Beneish M-Score
-2.78 (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 -2.78 suggests that the company is not a manipulator.

EXLS' s 10-Year Beneish M-Score Range
Min: -2.83   Max: -2.17
Current: -2.78

-2.83
-2.17

During the past 13 years, the highest Beneish M-Score of ExlService Holdings, Inc. was -2.17. The lowest was -2.83. And the median was -2.42.


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 * 0.9728+0.528 * 0.9854+0.404 * 0.8706+0.892 * 1.0802+0.115 * 0.9413
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0024+4.679 * -0.0641-0.327 * 0.9457
=-2.78

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $76.1 Mil.
Revenue was 124.123 + 122.315 + 116.008 + 116.006 = $478.5 Mil.
Gross Profit was 52.073 + 50.266 + 42.078 + 43.093 = $187.5 Mil.
Total Current Assets was $252.6 Mil.
Total Assets was $463.4 Mil.
Property, Plant and Equipment(Net PPE) was $34.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.9 Mil.
Selling, General & Admin. Expense(SGA) was $95.5 Mil.
Total Current Liabilities was $76.1 Mil.
Long-Term Debt was $1.4 Mil.
Net Income was 15.859 + 13.24 + 9.236 + 9.762 = $48.1 Mil.
Non Operating Income was -1.864 + -2.508 + -0.569 + -0.049 = $-5.0 Mil.
Cash Flow from Operations was 38.562 + 18.829 + 18.779 + 6.622 = $82.8 Mil.
Accounts Receivable was $72.4 Mil.
Revenue was 117.653 + 112.639 + 108.03 + 104.608 = $442.9 Mil.
Gross Profit was 47.144 + 43.989 + 41.985 + 37.936 = $171.1 Mil.
Total Current Assets was $206.1 Mil.
Total Assets was $435.9 Mil.
Property, Plant and Equipment(Net PPE) was $39.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.6 Mil.
Selling, General & Admin. Expense(SGA) was $88.2 Mil.
Total Current Liabilities was $74.3 Mil.
Long-Term Debt was $2.7 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)
=(76.121 / 478.452) / (72.443 / 442.93)
=0.15909851 / 0.16355406
=0.9728

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)
=(50.266 / 442.93) / (52.073 / 478.452)
=0.38618743 / 0.39190974
=0.9854

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 - (252.627 + 34.564) / 463.432) / (1 - (206.104 + 39.356) / 435.854)
=0.38029528 / 0.43682976
=0.8706

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
=478.452 / 442.93
=1.0802

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))
=(25.623 / (25.623 + 39.356)) / (24.917 / (24.917 + 34.564))
=0.3943274 / 0.41890688
=0.9413

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)
=(95.497 / 478.452) / (88.199 / 442.93)
=0.19959578 / 0.19912627
=1.0024

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)
=((1.371 + 76.075) / 463.432) / ((2.679 + 74.341) / 435.854)
=0.16711405 / 0.17671055
=0.9457

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
=(48.097 - -4.99 - 82.792) / 463.432
=-0.0641

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 -2.78 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.02350.88330.89820.79260.86421.05921.12421.111.02260.9728
GMI 1.07971.02981.03471.03531.01721.00950.98471.00250.99370.9854
AQI 1.42631.41041.40810.88840.83750.97990.98081.00241.02560.8706
SGI 1.35451.42651.44651.40491.30441.22851.15831.11331.10311.0802
DEPI 0.92490.88950.9040.76820.89170.89280.88760.90240.850.9413
SGAI 0.9180.90420.90410.90110.91730.94170.97830.99531.041.0024
LVGI 1.32981.21231.08480.61930.79170.8720.88720.92910.96230.9457
TATA -0.0682-0.0658-0.0529-0.0306-0.0407-0.0492-0.0496-0.0613-0.0425-0.0641
M-score -2.35-2.40-2.26-2.36-2.51-2.42-2.44-2.55-2.57-2.78
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