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M/A-COM Technology Solutions Holdings Inc (NAS:MTSI)
Beneish M-Score
-1.11 (As of Today)

Warning Sign:

Beneish M-Score -1.11 higher than -2.22, which implies that it might have manipulated its financial results.

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 -1.11 signals that the company is a manipulator.

MTSI' s 10-Year Beneish M-Score Range
Min: -2.54   Max: -1.11
Current: -1.11

-2.54
-1.11

During the past 5 years, the highest Beneish M-Score of M/A-COM Technology Solutions Holdings Inc was -1.11. The lowest was -2.54. And the median was -1.91.


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 * 1.3666+0.528 * 1.1258+0.404 * 5.8099+0.892 * 1.169+0.115 * 1.0675
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2864+4.679 * -0.0472-0.327 * 3.6347
=-1.11

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $85.5 Mil.
Revenue was 107.827 + 83.468 + 83.655 + 82.225 = $357.2 Mil.
Gross Profit was 26.863 + 36.665 + 37.28 + 36.293 = $137.1 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 $21.8 Mil.
Selling, General & Admin. Expense(SGA) was $70.1 Mil.
Total Current Liabilities was $89.4 Mil.
Long-Term Debt was $245.0 Mil.
Net Income was -22.122 + -6.499 + 3.75 + 9.367 = $-15.5 Mil.
Non Operating Income was -3.057 + 1.36 + -2.198 + 1.183 = $-2.7 Mil.
Cash Flow from Operations was -8.685 + 4.401 + 1.317 + 16.888 = $13.9 Mil.
Accounts Receivable was $53.5 Mil.
Revenue was 78.843 + 75.014 + 74.563 + 77.125 = $305.5 Mil.
Gross Profit was 32.833 + 32.265 + 31.534 + 35.404 = $132.0 Mil.
Total Current Assets was $227.3 Mil.
Total Assets was $279.7 Mil.
Property, Plant and Equipment(Net PPE) was $29.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.7 Mil.
Selling, General & Admin. Expense(SGA) was $46.6 Mil.
Total Current Liabilities was $45.5 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)
=(85.49 / 357.175) / (53.515 / 305.545)
=0.23935046 / 0.17514605
=1.3666

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)
=(36.665 / 305.545) / (26.863 / 357.175)
=0.43213275 / 0.38384825
=1.1258

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 - (248.369 + 48.268) / 566.278) / (1 - (227.267 + 29.539) / 279.732)
=0.47616365 / 0.08195702
=5.8099

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
=357.175 / 305.545
=1.169

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))
=(14.696 / (14.696 + 29.539)) / (21.81 / (21.81 + 48.268))
=0.33222561 / 0.31122464
=1.0675

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)
=(70.063 / 357.175) / (46.592 / 305.545)
=0.19615875 / 0.15248818
=1.2864

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)
=((245 + 89.429) / 566.278) / ((0 + 45.452) / 279.732)
=0.59057389 / 0.16248409
=3.6347

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
=(-15.504 - -2.712 - 13.921) / 566.278
=-0.0472

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 -1.11 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.15851.02111.2311.3666
GMI 1.05431.02931.02371.1258
AQI 0.7120.98635.27265.8099
SGI 1.01371.0581.07891.169
DEPI 0.80350.96851.29831.0675
SGAI 1.0831.07341.231.2864
LVGI 0.7390.79893.16843.6347
TATA -0.0375-0.027-0.0343-0.0472
M-score -2.54-2.48-1.33-1.11
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