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GuruFocus has detected 6 Warning Signs with Exponent Inc $EXPO.
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Exponent Inc (NAS:EXPO)
Beneish M-Score
-2.72 (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.

Exponent Inc has a M-score of -1.82 signals that the company is a manipulator.

EXPO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.79   Max: -0.97
Current: -2.72

-3.79
-0.97

During the past 13 years, the highest Beneish M-Score of Exponent Inc was -0.97. The lowest was -3.79. And the median was -2.59.


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 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
=-1.82

* 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

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)
=(94.292 / 311.744) / (58.382 / 312.762)
=0.30246613 / 0.1866659
=1.6204

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)
=(115.631 / 312.762) / (94.839 / 311.744)
=0.36970924 / 0.30422077
=1.2153

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 - (257.306 + 37.457) / 385.415) / (1 - (269.458 + 29.39) / 368.981)
=0.23520621 / 0.19007212
=1.2375

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
=311.744 / 312.762
=0.9967

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))
=0.15664725 / 0.13715418
=1.1421

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)
=0.01726096 / 0.06414462
=0.2691

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)
=0.17945591 / 0.18852732
=0.9519

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
=(46.942 - 6.506 - 63.413) / 385.415
=-0.0596

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.


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 local exchange's currency.

Exponent Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.01920.93231.01151.05310.92611.08760.89111.09050.9989
GMI 2.61810.97621.10390.92990.93921.01820.99930.93420.9756
AQI 0.91061.05461.20251.01721.11831.04111.11251.20480.997
SGI 1.21751.11550.99581.09161.09521.07421.0121.02881.0267
DEPI 1.13640.99840.89060.95020.98120.9520.99640.91610.995
SGAI 0.08470.99720.82541.02920.96860.96241.07231.04650.9404
LVGI 1.26471.0930.82871.02151.01391.00630.92131.03610.9561
TATA -0.0464-0.0725-0.0379-0.0456-0.0559-0.0478-0.0901-0.0323-0.0487
M-score -1.58-2.80-2.44-2.61-2.71-2.53-2.93-2.50-2.68

Exponent Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.09311.09051.00480.67471.01290.99890.70521.53061.62040.9798
GMI 0.96210.93420.96460.93160.92091.05891.04331.08821.21530.9445
AQI 1.03761.20481.08871.01630.97320.9971.13451.15021.23751.035
SGI 1.02541.02881.03191.03921.02931.02671.02161.00260.99671.0072
DEPI 0.95660.91610.92710.92010.9860.9951.02061.0121.14211.4747
SGAI 1.03461.04651.01121.02181.24080.40280.41190.41440.26912.8712
LVGI 1.11581.03610.84190.95410.93020.95610.94390.91070.95190.9569
TATA -0.0533-0.0323-0.0539-0.0363-0.0421-0.0487-0.0308-0.0386-0.05960.0092
M-score -2.67-2.50-2.64-2.94-2.71-2.54-2.68-1.93-1.82-2.72
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