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M/A-COM Technology Solutions Holdings Inc (NAS:MTSI)
Beneish M-Score
-2.47 (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.

M/A-COM Technology Solutions Holdings Inc has a M-score of -2.47 suggests that the company is not a manipulator.

MTSI' s 10-Year Beneish M-Score Range
Min: -2.66   Max: -1.27
Current: -2.47

-2.66
-1.27

During the past 6 years, the highest Beneish M-Score of M/A-COM Technology Solutions Holdings Inc was -1.27. The lowest was -2.66. And the median was -2.21.


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 M/A-COM Technology Solutions Holdings 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 * 0.8809+0.528 * 1.0181+0.404 * 1.208+0.892 * 1.357+0.115 * 0.5229
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1344+4.679 * -0.0327-0.327 * 1.2005
=-2.47

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $79.5 Mil.
Revenue was 114.864 + 114.317 + 112.364 + 107.827 = $449.4 Mil.
Gross Profit was 54.201 + 56.189 + 50.214 + 26.863 = $187.5 Mil.
Total Current Assets was $278.8 Mil.
Total Assets was $777.3 Mil.
Property, Plant and Equipment(Net PPE) was $59.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $58.4 Mil.
Selling, General & Admin. Expense(SGA) was $92.4 Mil.
Total Current Liabilities was $71.9 Mil.
Long-Term Debt was $443.2 Mil.
Net Income was -6.306 + 14.537 + 1.183 + -22.122 = $-12.7 Mil.
Non Operating Income was -10.233 + 2.414 + -1.428 + -3.057 = $-12.3 Mil.
Cash Flow from Operations was 2.083 + 15.56 + 14.014 + -6.622 = $25.0 Mil.
Accounts Receivable was $66.5 Mil.
Revenue was 84.154 + 84.675 + 83.477 + 78.843 = $331.1 Mil.
Gross Profit was 35.722 + 36.59 + 35.504 + 32.833 = $140.6 Mil.
Total Current Assets was $254.9 Mil.
Total Assets was $567.7 Mil.
Property, Plant and Equipment(Net PPE) was $47.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.6 Mil.
Selling, General & Admin. Expense(SGA) was $60.0 Mil.
Total Current Liabilities was $93.4 Mil.
Long-Term Debt was $220.0 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)
=(79.452 / 449.372) / (66.468 / 331.149)
=0.17680674 / 0.20071931
=0.8809

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)
=(56.189 / 331.149) / (54.201 / 449.372)
=0.42473026 / 0.41717552
=1.0181

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 - (278.802 + 59.393) / 777.291) / (1 - (254.858 + 47.353) / 567.696)
=0.56490555 / 0.46765346
=1.208

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
=449.372 / 331.149
=1.357

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))
=(16.572 / (16.572 + 47.353)) / (58.4 / (58.4 + 59.393))
=0.2592413 / 0.49578498
=0.5229

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)
=(92.395 / 449.372) / (60.019 / 331.149)
=0.20560916 / 0.1812447
=1.1344

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)
=((443.248 + 71.898) / 777.291) / ((220 + 93.409) / 567.696)
=0.66274536 / 0.55207188
=1.2005

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
=(-12.708 - -12.304 - 25.035) / 777.291
=-0.0327

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.

M/A-COM Technology Solutions Holdings Inc has a M-score of -2.47 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.

M/A-COM Technology Solutions Holdings Inc Annual Data

Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.09670.9129
GMI 1.05721.0461
AQI 1.2773.2037
SGI 1.06911.2959
DEPI 0.93930.6096
SGAI 1.08691.2788
LVGI 0.79243.8158
TATA -0.0214-0.0585
M-score -2.24-2.67

M/A-COM Technology Solutions Holdings Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.07191.10031.17091.16061.1010.90990.8809
GMI 1.06491.04781.05081.15551.10321.05551.0181
AQI 0.7121.2775.27265.80995.25323.20371.208
SGI 1.01781.06551.08871.17871.24731.30021.357
DEPI 0.77330.93931.19641.03070.90480.60960.5229
SGAI 1.0891.081.24331.29711.29771.2871.1344
LVGI 0.7390.79243.16843.63473.9113.81581.2005
TATA -0.025-0.0149-0.0288-0.0453-0.0471-0.0585-0.0327
M-score -2.55-2.21-1.35-1.27-1.63-2.66-2.47
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