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M/A-COM Technology Solutions Holdings Inc (NAS:MTSI)
Beneish M-Score
-1.64 (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 -1.64 signals that the company is a manipulator.

MTSI' s 10-Year Beneish M-Score Range
Min: -2.48   Max: -1.07
Current: -1.64

-2.48
-1.07

During the past 5 years, the highest Beneish M-Score of M/A-COM Technology Solutions Holdings Inc was -1.07. The lowest was -2.48. And the median was -1.64.


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 * 1.091+0.528 * 1.059+0.404 * 5.2532+0.892 * 1.2311+0.115 * 0.927
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2775+4.679 * -0.0417-0.327 * 3.911
=-1.64

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $79.8 Mil.
Revenue was 112.364 + 107.827 + 83.468 + 80.322 = $384.0 Mil.
Gross Profit was 50.214 + 26.863 + 36.665 + 39.876 = $153.6 Mil.
Total Current Assets was $365.9 Mil.
Total Assets was $679.3 Mil.
Property, Plant and Equipment(Net PPE) was $48.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.9 Mil.
Selling, General & Admin. Expense(SGA) was $77.6 Mil.
Total Current Liabilities was $96.0 Mil.
Long-Term Debt was $343.9 Mil.
Net Income was 1.183 + -22.122 + -6.499 + 10.855 = $-16.6 Mil.
Non Operating Income was -1.428 + -3.057 + 1.36 + -2.198 = $-5.3 Mil.
Cash Flow from Operations was 14.014 + -8.685 + 4.401 + 7.368 = $17.1 Mil.
Accounts Receivable was $59.4 Mil.
Revenue was 83.477 + 78.843 + 75.014 + 74.563 = $311.9 Mil.
Gross Profit was 35.504 + 32.833 + 32.265 + 31.534 = $132.1 Mil.
Total Current Assets was $243.3 Mil.
Total Assets was $293.8 Mil.
Property, Plant and Equipment(Net PPE) was $28.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.1 Mil.
Selling, General & Admin. Expense(SGA) was $49.3 Mil.
Total Current Liabilities was $48.7 Mil.
Long-Term Debt was $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)
=(79.805 / 383.981) / (59.415 / 311.897)
=0.2078358 / 0.19049558
=1.091

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)
=(26.863 / 311.897) / (50.214 / 383.981)
=0.42365268 / 0.40006667
=1.059

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 - (365.864 + 48.86) / 679.334) / (1 - (243.282 + 28.749) / 293.817)
=0.38951385 / 0.07414819
=5.2532

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
=383.981 / 311.897
=1.2311

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))
=(15.115 / (15.115 + 28.749)) / (28.908 / (28.908 + 48.86))
=0.34458782 / 0.37172102
=0.927

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)
=(77.594 / 383.981) / (49.335 / 311.897)
=0.20207771 / 0.15817722
=1.2775

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)
=((343.938 + 95.985) / 679.334) / ((0 + 48.65) / 293.817)
=0.64757984 / 0.16557926
=3.911

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
=(-16.583 - -5.323 - 17.098) / 679.334
=-0.0417

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 -1.64 signals that the company is likely to 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

Sep09Sep10Sep11Sep12Sep13
DSRI 1.0244
GMI 1.0184
AQI 0.9863
SGI 1.0546
DEPI 0.9685
SGAI 1.0645
LVGI 0.7989
TATA -0.0182
M-score -2.44

M/A-COM Technology Solutions Holdings Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.15391.02781.23891.37461.091
GMI 1.06491.00941.00461.10471.059
AQI 0.7120.98635.27265.80995.2532
SGI 1.01781.05111.07211.16221.2311
DEPI 0.77330.96851.29831.06750.927
SGAI 1.0891.05741.2151.27391.2775
LVGI 0.7390.79893.16843.63473.911
TATA -0.025-0.0115-0.026-0.0388-0.0417
M-score -2.48-2.41-1.30-1.07-1.64
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