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M/A-COM Technology Solutions Holdings Inc (NAS:MTSI)
Beneish M-Score
-2.37 (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 -2.37 suggests that the company is not a manipulator.

MTSI' s 10-Year Beneish M-Score Range
Min: -2.66   Max: -1.3
Current: -2.37

-2.66
-1.3

During the past 6 years, the highest Beneish M-Score of M/A-COM Technology Solutions Holdings Inc was -1.30. The lowest was -2.66. And the median was -2.29.


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 * 1.0158+0.528 * 0.8128+0.404 * 1.1184+0.892 * 1.2952+0.115 * 1.0903
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0527+4.679 * -0.0343-0.327 * 0.8686
=-2.37

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $89.4 Mil.
Revenue was 124.885 + 114.864 + 114.317 + 112.364 = $466.4 Mil.
Gross Profit was 54.007 + 54.201 + 56.189 + 50.214 = $214.6 Mil.
Total Current Assets was $308.7 Mil.
Total Assets was $800.2 Mil.
Property, Plant and Equipment(Net PPE) was $65.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.6 Mil.
Selling, General & Admin. Expense(SGA) was $97.1 Mil.
Total Current Liabilities was $68.2 Mil.
Long-Term Debt was $342.3 Mil.
Net Income was -7.537 + -6.306 + 14.537 + 1.183 = $1.9 Mil.
Non Operating Income was -6.985 + -10.233 + 2.414 + -1.428 = $-16.2 Mil.
Cash Flow from Operations was 13.935 + 2.083 + 15.56 + 14.014 = $45.6 Mil.
Accounts Receivable was $67.9 Mil.
Revenue was 107.827 + 84.154 + 84.675 + 83.477 = $360.1 Mil.
Gross Profit was 26.863 + 35.722 + 36.59 + 35.504 = $134.7 Mil.
Total Current Assets was $248.4 Mil.
Total Assets was $566.3 Mil.
Property, Plant and Equipment(Net PPE) was $48.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.0 Mil.
Selling, General & Admin. Expense(SGA) was $71.2 Mil.
Total Current Liabilities was $89.4 Mil.
Long-Term Debt was $245.0 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)
=(89.35 / 466.43) / (67.913 / 360.133)
=0.19156143 / 0.18857755
=1.0158

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)
=(54.201 / 360.133) / (54.007 / 466.43)
=0.37397017 / 0.46011406
=0.8128

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 - (308.74 + 65.352) / 800.249) / (1 - (248.369 + 48.268) / 566.278)
=0.5325305 / 0.47616365
=1.1184

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
=466.43 / 360.133
=1.2952

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))
=(41.011 / (41.011 + 48.268)) / (47.576 / (47.576 + 65.352))
=0.45935774 / 0.42129498
=1.0903

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)
=(97.118 / 466.43) / (71.234 / 360.133)
=0.2082156 / 0.19779915
=1.0527

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)
=((342.335 + 68.173) / 800.249) / ((245 + 89.429) / 566.278)
=0.51297534 / 0.59057389
=0.8686

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
=(1.877 - -16.232 - 45.592) / 800.249
=-0.0343

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 -2.37 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.07191.10031.17091.16061.1010.90990.88091.0158
GMI 1.06491.04781.05081.15551.10321.05551.01810.8128
AQI 0.7121.2775.27265.80995.25323.20371.2081.1184
SGI 1.01781.06551.08871.17871.24731.30021.3571.2952
DEPI 0.77330.93931.19640.72320.90480.60960.52291.0903
SGAI 1.0891.081.24331.29711.29771.2871.13441.0527
LVGI 0.7390.79243.16843.63473.9113.81581.20050.8686
TATA -0.025-0.0149-0.0288-0.0453-0.0471-0.0585-0.0327-0.0343
M-score -2.55-2.21-1.35-1.30-1.63-2.66-2.47-2.37
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