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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.
Mercury Systems Inc has a M-score of -2.67 suggests that the company is not a manipulator.
During the past 0 years, the highest Beneish M-Score of Mercury Systems Inc was -0.99. The lowest was -3.36. And the median was -2.73.
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 Mercury 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 * 1.194||+||0.528 * 0.8865||+||0.404 * 0.9344||+||0.892 * 1.0746||+||0.115 * 1.0358|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9122||+||4.679 * -0.0728||-||0.327 * 1.0706|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $59.7 Mil.|
Revenue was 46.199 + 55.5 + 53.09 + 53.94 = $208.7 Mil.
Gross Profit was 22.094 + 25.127 + 24.938 + 22.585 = $94.7 Mil.
Total Current Assets was $160.3 Mil.
Total Assets was $373.7 Mil.
Property, Plant and Equipment(Net PPE) was $14.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.6 Mil.
Selling, General & Admin. Expense(SGA) was $53.7 Mil.
Total Current Liabilities was $32.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -7.546 + -0.578 + -1.045 + -2.256 = $-11.4 Mil.
Non Operating Income was 0.323 + 0.337 + 0.44 + 0.432 = $1.5 Mil.
Cash Flow from Operations was 2.509 + 2.201 + 7.358 + 2.173 = $14.2 Mil.
|Accounts Receivable was $46.5 Mil.
Revenue was 40.876 + 54.123 + 49.804 + 49.428 = $194.2 Mil.
Gross Profit was 17.622 + 22.574 + 17.572 + 20.39 = $78.2 Mil.
Total Current Assets was $146.3 Mil.
Total Assets was $374.4 Mil.
Property, Plant and Equipment(Net PPE) was $14.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.2 Mil.
Selling, General & Admin. Expense(SGA) was $54.8 Mil.
Total Current Liabilities was $30.8 Mil.
Long-Term Debt was $0.0 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)|
|=||(59.661 / 208.729)||/||(46.495 / 194.231)|
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)|
|=||(25.127 / 194.231)||/||(22.094 / 208.729)|
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 - (160.305 + 14.144) / 373.712)||/||(1 - (146.301 + 14.462) / 374.431)|
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))|
|=||(17.209 / (17.209 + 14.462))||/||(15.608 / (15.608 + 14.144))|
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)|
|=||(53.685 / 208.729)||/||(54.764 / 194.231)|
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 + 32.93) / 373.712)||/||((0 + 30.818) / 374.431)|
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|
|=||(-11.425 - 1.532||-||14.241)||/||373.712|
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.
Mercury Systems Inc has a M-score of -2.67 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
Mercury Systems Inc Annual Data
Mercury Systems Inc Quarterly Data