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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 Exponent Inc was 6.81. The lowest was -4.41. And the median was -2.65.
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 Exponent 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 * 1.6204||+||0.528 * 1.2153||+||0.404 * 1.2375||+||0.892 * 0.9967||+||0.115 * 1.1421|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.2691||+||4.679 * -0.0596||-||0.327 * 0.9519|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $94.3 Mil.|
Revenue was 77.612 + 77.295 + 83.156 + 73.681 = $311.7 Mil.
Gross Profit was 29.815 + 26.294 + 26.933 + 11.797 = $94.8 Mil.
Total Current Assets was $257.3 Mil.
Total Assets was $385.4 Mil.
Property, Plant and Equipment(Net PPE) was $37.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.0 Mil.
Selling, General & Admin. Expense(SGA) was $5.4 Mil.
Total Current Liabilities was $69.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 11.289 + 10.453 + 15.35 + 9.85 = $46.9 Mil.
Non Operating Income was 2.146 + 1.575 + 1.159 + 1.626 = $6.5 Mil.
Cash Flow from Operations was 22.689 + 14.232 + 0.313 + 26.179 = $63.4 Mil.
|Accounts Receivable was $58.4 Mil.
Revenue was 78.994 + 79.864 + 80.293 + 73.611 = $312.8 Mil.
Gross Profit was 36.141 + 29.495 + 25.026 + 24.969 = $115.6 Mil.
Total Current Assets was $269.5 Mil.
Total Assets was $369.0 Mil.
Property, Plant and Equipment(Net PPE) was $29.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.5 Mil.
Selling, General & Admin. Expense(SGA) was $20.1 Mil.
Total Current Liabilities was $69.6 Mil.
Long-Term Debt was $0.0 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)|
|=||(94.292 / 311.744)||/||(58.382 / 312.762)|
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)|
|=||(115.631 / 312.762)||/||(94.839 / 311.744)|
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 - (257.306 + 37.457) / 385.415)||/||(1 - (269.458 + 29.39) / 368.981)|
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))|
|=||(5.459 / (5.459 + 29.39))||/||(5.954 / (5.954 + 37.457))|
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)|
|=||(5.381 / 311.744)||/||(20.062 / 312.762)|
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)|
|=||((0 + 69.165) / 385.415)||/||((0 + 69.563) / 368.981)|
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|
|=||(46.942 - 6.506||-||63.413)||/||385.415|
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.
Exponent Inc has a M-score of -1.82 signals that the company is likely to 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
Exponent Inc Annual Data
Exponent Inc Quarterly Data