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M/A-COM Technology Solutions Holdings Inc (NAS:MTSI)
Beneish M-Score
-1.31 (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 -1.31 signals that the company is a manipulator.

MTSI' s 10-Year Beneish M-Score Range
Min: -2.5   Max: -1.31
Current: -1.31

-2.5
-1.31

During the past 5 years, the highest Beneish M-Score of M/A-COM Technology Solutions Holdings Inc was -1.31. The lowest was -2.50. And the median was -2.44.


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 * 1.2348+0.528 * 1.0133+0.404 * 5.2726+0.892 * 1.0756+0.115 * 1.2983
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2216+4.679 * -0.0296-0.327 * 3.1684
=-1.31

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $72.1 Mil.
Revenue was 83.468 + 83.655 + 82.225 + 77.824 = $327.2 Mil.
Gross Profit was 36.665 + 37.28 + 36.293 + 33.861 = $144.1 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 $14.9 Mil.
Selling, General & Admin. Expense(SGA) was $58.3 Mil.
Total Current Liabilities was $93.4 Mil.
Long-Term Debt was $220.0 Mil.
Net Income was -6.499 + 3.75 + 9.367 + 8.086 = $14.7 Mil.
Non Operating Income was 1.36 + -2.198 + 1.183 + -0.983 = $-0.6 Mil.
Cash Flow from Operations was 4.401 + 1.317 + 13.447 + 12.995 = $32.2 Mil.
Accounts Receivable was $54.3 Mil.
Revenue was 75.014 + 74.563 + 77.125 + 77.48 = $304.2 Mil.
Gross Profit was 32.265 + 31.534 + 35.404 + 36.549 = $135.8 Mil.
Total Current Assets was $216.7 Mil.
Total Assets was $270.2 Mil.
Property, Plant and Equipment(Net PPE) was $29.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.3 Mil.
Selling, General & Admin. Expense(SGA) was $44.3 Mil.
Total Current Liabilities was $47.1 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)
=(72.093 / 327.172) / (54.28 / 304.182)
=0.22035199 / 0.1784458
=1.2348

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)
=(37.28 / 304.182) / (36.665 / 327.172)
=0.44628545 / 0.44043806
=1.0133

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 - (254.858 + 47.353) / 567.696) / (1 - (216.692 + 29.548) / 270.206)
=0.46765346 / 0.08869529
=5.2726

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
=327.172 / 304.182
=1.0756

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))
=(13.285 / (13.285 + 29.548)) / (14.863 / (14.863 + 47.353))
=0.31015806 / 0.23889353
=1.2983

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)
=(58.264 / 327.172) / (44.343 / 304.182)
=0.1780837 / 0.14577786
=1.2216

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)
=((220 + 93.409) / 567.696) / ((0 + 47.082) / 270.206)
=0.55207188 / 0.17424484
=3.1684

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
=(14.704 - -0.638 - 32.16) / 567.696
=-0.0296

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 -1.31 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.16231.02441.2348
GMI 1.04281.01841.0133
AQI 0.7120.98635.2726
SGI 1.01041.05461.0756
DEPI 0.80350.96851.2983
SGAI 1.07361.06451.2216
LVGI 0.7390.79893.1684
TATA -0.0284-0.0182-0.0296
M-score -2.50-2.44-1.31
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