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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 Globecomm Systems, Inc. was 0.00. The lowest was 0.00. And the median was 0.00.
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 Globecomm Systems, 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 * 1.111||+||0.528 * 0.8604||+||0.404 * 1.0111||+||0.892 * 0.7542||+||0.115 * 1.0357|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.4323||+||4.679 * -0.0834||-||0.327 * 0.7195|
|This Year (Sep13) TTM:||Last Year (Sep12) TTM:|
|Accounts Receivable was $49.7 Mil.|
Revenue was 57.262 + 80.645 + 78.067 + 79.739 = $295.7 Mil.
Gross Profit was 15.046 + 19.963 + 20.221 + 19.253 = $74.5 Mil.
Total Current Assets was $171.4 Mil.
Total Assets was $312.6 Mil.
Property, Plant and Equipment(Net PPE) was $50.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.3 Mil.
Selling, General & Admin. Expense(SGA) was $51.5 Mil.
Total Current Liabilities was $45.5 Mil.
Long-Term Debt was $7.0 Mil.
Net Income was 0.155 + 4.558 + 4.176 + 3.829 = $12.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 9.617 + 19.052 + 2.162 + 7.959 = $38.8 Mil.
|Accounts Receivable was $59.3 Mil.
Revenue was 81.163 + 104.812 + 110.929 + 95.19 = $392.1 Mil.
Gross Profit was 17.087 + 21.186 + 23.7 + 22.999 = $85.0 Mil.
Total Current Assets was $170.7 Mil.
Total Assets was $307.8 Mil.
Property, Plant and Equipment(Net PPE) was $48.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.4 Mil.
Selling, General & Admin. Expense(SGA) was $47.7 Mil.
Total Current Liabilities was $58.7 Mil.
Long-Term Debt was $13.1 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)|
|=||(49.701 / 295.713)||/||(59.315 / 392.094)|
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)|
|=||(84.972 / 392.094)||/||(74.483 / 295.713)|
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 - (171.376 + 50.089) / 312.625)||/||(1 - (170.705 + 48.331) / 307.804)|
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))|
|=||(12.44 / (12.44 + 48.331))||/||(12.339 / (12.339 + 50.089))|
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)|
|=||(51.478 / 295.713)||/||(47.655 / 392.094)|
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)|
|=||((6.95 + 45.453) / 312.625)||/||((13.05 + 58.662) / 307.804)|
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|
|=||(12.718 - 0||-||38.79)||/||312.625|
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.
Globecomm Systems, Inc. has a M-score of -3.04 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
Globecomm Systems, Inc. Annual Data
Globecomm Systems, Inc. Quarterly Data