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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.
GigOptix Inc has a M-score of -2.68 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of GigOptix Inc was -2.12. The lowest was -3.50. And the median was -2.91.
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 GigOptix 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 * 0.9886||+||0.528 * 1.0416||+||0.404 * 0.9242||+||0.892 * 1.0936||+||0.115 * 0.8307|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9194||+||4.679 * -0.0999||-||0.327 * 0.3626|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $7.71 Mil.|
Revenue was 8.484 + 8.037 + 7.386 + 7.838 = $31.75 Mil.
Gross Profit was 5.002 + 4.55 + 4.26 + 4.515 = $18.33 Mil.
Total Current Assets was $30.52 Mil.
Total Assets was $45.74 Mil.
Property, Plant and Equipment(Net PPE) was $2.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.78 Mil.
Selling, General & Admin. Expense(SGA) was $9.86 Mil.
Total Current Liabilities was $5.19 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.786 + -2.044 + -1.897 + -1.522 = $-6.25 Mil.
Non Operating Income was 0.035 + 0 + 0.01 + -0.002 = $0.04 Mil.
Cash Flow from Operations was -0.074 + -0.531 + -0.207 + -0.91 = $-1.72 Mil.
|Accounts Receivable was $7.13 Mil.
Revenue was 7.336 + 6.831 + 6.921 + 7.941 = $29.03 Mil.
Gross Profit was 4.351 + 4.253 + 4.285 + 4.568 = $17.46 Mil.
Total Current Assets was $27.36 Mil.
Total Assets was $44.53 Mil.
Property, Plant and Equipment(Net PPE) was $3.29 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.84 Mil.
Selling, General & Admin. Expense(SGA) was $9.81 Mil.
Total Current Liabilities was $13.93 Mil.
Long-Term Debt was $0.00 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)|
|=||(7.707 / 31.745)||/||(7.129 / 29.029)|
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)|
|=||(4.55 / 29.029)||/||(5.002 / 31.745)|
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 - (30.521 + 2.047) / 45.737)||/||(1 - (27.364 + 3.292) / 44.528)|
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))|
|=||(3.843 / (3.843 + 3.292))||/||(3.775 / (3.775 + 2.047))|
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)|
|=||(9.864 / 31.745)||/||(9.811 / 29.029)|
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 + 5.186) / 45.737)||/||((0 + 13.926) / 44.528)|
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|
|=||(-6.249 - 0.043||-||-1.722)||/||45.737|
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.
GigOptix Inc has a M-score of -2.68 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
GigOptix Inc Annual Data
GigOptix Inc Quarterly Data