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Globecomm Systems, Inc. (NAS:GCOM)
Beneish M-Score
-3.04 (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.

Globecomm Systems, Inc. has a M-score of -3.04 suggests that the company is not a manipulator.

GCOM' s 10-Year Beneish M-Score Range
Min: -8.58   Max: 7.99
Current: -3.04

-8.58
7.99

During the past 13 years, the highest Beneish M-Score of Globecomm Systems, Inc. was 7.99. The lowest was -8.58. And the median was -2.49.


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 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
=-3.04

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

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

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)
=(49.701 / 295.713) / (59.315 / 392.094)
=0.16807175 / 0.1512775
=1.111

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)
=(19.963 / 392.094) / (15.046 / 295.713)
=0.21671334 / 0.25187597
=0.8604

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 - (171.376 + 50.089) / 312.625) / (1 - (170.705 + 48.331) / 307.804)
=0.29159536 / 0.28839131
=1.0111

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
=295.713 / 392.094
=0.7542

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))
=0.2047029 / 0.19765169
=1.0357

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)
=0.17408095 / 0.12153973
=1.4323

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)
=0.16762255 / 0.23297943
=0.7195

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
=(12.718 - 0 - 38.79) / 312.625
=-0.0834

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.


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.

Globecomm Systems, Inc. Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 1.12751.26211.18111.04051.04141.00710.80911.00160.71661.1788
GMI -0.47360.73641.02310.85240.91371.03260.90130.87091.16280.9489
AQI 0.86710.84420.91832.12541.03921.30371.09691.17170.8870.9787
SGI 1.61461.25621.15011.1961.30370.86581.33881.20361.39280.8369
DEPI 1.00351.1620.88141.78980.62090.96770.91910.88190.8951.0804
SGAI 0.4540.94211.07691.04010.99291.24891.00491.12840.57211.4082
LVGI 0.87221.10510.93711.47170.550.81891.5581.16080.75610.6618
TATA -0.04140.10420.0471-0.05040.0847-0.0298-0.0235-0.0255-0.0633-0.067
M-score -2.70-1.73-1.99-2.20-1.70-2.58-2.67-2.50-2.50-2.76

Globecomm Systems, Inc. Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
DSRI 1.00160.93550.94210.74780.71660.81820.68371.11331.17881.111
GMI 0.87090.91260.9631.0761.16281.21061.20211.06420.94890.8604
AQI 1.17171.1411.18991.21950.8870.89820.94550.96570.97871.0111
SGI 1.20361.25121.28561.42611.39281.3431.18850.9410.83690.7542
DEPI 0.88190.8250.81790.8630.8950.9951.06951.11531.08041.0357
SGAI 1.08260.93140.80830.75730.59630.75430.95751.04551.40821.4323
LVGI 1.16081.30311.11161.01190.75610.75680.72410.71080.66180.7195
TATA -0.0255-0.0432-0.0132-0.0697-0.0633-0.0883-0.1019-0.0462-0.067-0.0834
M-score -2.50-2.61-2.31-2.51-2.51-2.56-2.89-2.52-2.76-3.04
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