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Guidewire Software Inc (NYSE:GWRE)
Beneish M-Score
0.00 (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.

Guidewire Software Inc has a M-score of -2.76 suggests that the company is not a manipulator.

During the past 8 years, the highest Beneish M-Score of Guidewire Software Inc was 0.00. The lowest was 0.00. And the median was 0.00.


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 Guidewire Software 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 * 0.8914+0.528 * 0.9702+0.404 * 1.6069+0.892 * 1.1389+0.115 * 0.8191
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0613+4.679 * -0.0971-0.327 * 1.1363
=-2.76

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was USD 55.1 Mil.
Revenue was 94.127 + 141.177 + 98.86 + 102.129 = USD 436.3 Mil.
Gross Profit was 52.108 + 98.421 + 59.853 + 67.228 = USD 277.6 Mil.
Total Current Assets was USD 605.5 Mil.
Total Assets was USD 903.4 Mil.
Property, Plant and Equipment(Net PPE) was USD 13.0 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 10.1 Mil.
Selling, General & Admin. Expense(SGA) was USD 152.9 Mil.
Total Current Liabilities was USD 100.1 Mil.
Long-Term Debt was USD 0.0 Mil.
Net Income was -7.858 + 16.097 + -0.404 + 0.913 = USD 8.7 Mil.
Non Operating Income was -0.681 + -0.344 + 0.804 + -1.182 = USD -1.4 Mil.
Cash Flow from Operations was -12.91 + 49.259 + 23.611 + 37.92 = USD 97.9 Mil.
Accounts Receivable was USD 54.3 Mil.
Revenue was 82.28 + 125.917 + 85.44 + 89.446 = USD 383.1 Mil.
Gross Profit was 47.11 + 86.488 + 47.536 + 55.366 = USD 236.5 Mil.
Total Current Assets was USD 619.1 Mil.
Total Assets was USD 786.9 Mil.
Property, Plant and Equipment(Net PPE) was USD 13.4 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 7.5 Mil.
Selling, General & Admin. Expense(SGA) was USD 126.5 Mil.
Total Current Liabilities was USD 76.7 Mil.
Long-Term Debt was USD 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)
=(55.132 / 436.293) / (54.303 / 383.083)
=0.12636462 / 0.14175257
=0.8914

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)
=(236.5 / 383.083) / (277.61 / 436.293)
=0.61735968 / 0.63629258
=0.9702

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 - (605.493 + 13.01) / 903.394) / (1 - (619.082 + 13.418) / 786.932)
=0.31535631 / 0.19624567
=1.6069

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
=436.293 / 383.083
=1.1389

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))
=(7.498 / (7.498 + 13.418)) / (10.125 / (10.125 + 13.01))
=0.35848155 / 0.43764858
=0.8191

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)
=(152.938 / 436.293) / (126.53 / 383.083)
=0.35053966 / 0.33029396
=1.0613

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 + 100.07) / 903.394) / ((0 + 76.711) / 786.932)
=0.11077116 / 0.0974811
=1.1363

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
=(8.748 - -1.403 - 97.88) / 903.394
=-0.0971

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.

Guidewire Software Inc has a M-score of -2.76 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 local exchange's currency.

Guidewire Software Inc Annual Data

Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 1.18921.03170.97661.04641.14610.9071
GMI 1.02130.98631.05171.01280.93720.9548
AQI 461.76210.16117.79791.11430.52331.3536
SGI 1.1921.34551.29561.1651.08651.1154
DEPI 0.99751.69520.7230.77950.91570.9389
SGAI 1.2210.7620.99121.11331.06461.0437
LVGI 0.62350.50410.74630.51491.03610.9958
TATA 0.05220.0081-0.0254-0.0805-0.0647-0.0921
M-score 184.35-2.170.47-2.50-2.83-2.79

Guidewire Software Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.04640.71230.93360.9011.14611.28420.89710.93670.90710.8914
GMI 1.01280.92730.91020.94070.93720.96530.9690.95330.95480.9702
AQI 1.11431.5810.54040.54180.52330.92031.23881.38031.35361.6069
SGI 1.1651.1961.17221.13341.08651.0541.07131.09751.11541.1389
DEPI 0.77950.83480.87570.93550.91571.00031.01281.00350.93890.8191
SGAI 1.11331.08421.08131.08261.06461.08921.06561.05821.04371.0613
LVGI 0.51491.04481.04121.1121.03610.96541.020.93930.99581.1363
TATA -0.0805-0.0901-0.0718-0.0792-0.0647-0.0582-0.0932-0.0839-0.0921-0.0971
M-score -2.50-2.84-3.00-3.10-2.83-2.50-2.88-2.70-2.79-2.76
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