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Procera Networks Inc (NAS:PKT)
Beneish M-Score
-2.82 (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.

Procera Networks Inc has a M-score of -2.82 suggests that the company is not a manipulator.

PKT' s 10-Year Beneish M-Score Range
Min: -13.61   Max: 39.51
Current: -2.82

-13.61
39.51

During the past 12 years, the highest Beneish M-Score of Procera Networks Inc was 39.51. The lowest was -13.61. And the median was -2.31.


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 Procera Networks 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 * 0.8235+0.528 * 1.1343+0.404 * 0.9237+0.892 * 1.2209+0.115 * 0.6955
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0742+4.679 * -0.0583-0.327 * 1.2791
=-2.82

* 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 $12.97 Mil.
Revenue was 14.541 + 21.33 + 21.333 + 17.839 = $75.04 Mil.
Gross Profit was 8.384 + 12.363 + 10.357 + 10.725 = $41.83 Mil.
Total Current Assets was $141.59 Mil.
Total Assets was $168.13 Mil.
Property, Plant and Equipment(Net PPE) was $7.66 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.56 Mil.
Selling, General & Admin. Expense(SGA) was $41.02 Mil.
Total Current Liabilities was $20.03 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -5.976 + -3.302 + -2.983 + -3.282 = $-15.54 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0.475 + -0.052 + -1.539 + -4.632 = $-5.75 Mil.
Accounts Receivable was $12.90 Mil.
Revenue was 14.171 + 16.569 + 16.061 + 14.665 = $61.47 Mil.
Gross Profit was 7.369 + 10.727 + 11.521 + 9.247 = $38.86 Mil.
Total Current Assets was $149.40 Mil.
Total Assets was $176.44 Mil.
Property, Plant and Equipment(Net PPE) was $5.59 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.58 Mil.
Selling, General & Admin. Expense(SGA) was $31.27 Mil.
Total Current Liabilities was $16.43 Mil.
Long-Term Debt was $0.00 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)
=(12.965 / 75.043) / (12.895 / 61.466)
=0.17276761 / 0.20979078
=0.8235

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)
=(12.363 / 61.466) / (8.384 / 75.043)
=0.63228452 / 0.55740042
=1.1343

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 - (141.592 + 7.658) / 168.127) / (1 - (149.404 + 5.593) / 176.443)
=0.11227822 / 0.12154634
=0.9237

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
=75.043 / 61.466
=1.2209

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))
=(1.584 / (1.584 + 5.593)) / (3.56 / (3.56 + 7.658))
=0.22070503 / 0.31734712
=0.6955

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)
=(41.016 / 75.043) / (31.274 / 61.466)
=0.54656664 / 0.50880161
=1.0742

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)
=((0 + 20.028) / 168.127) / ((0 + 16.432) / 176.443)
=0.11912423 / 0.09312923
=1.2791

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
=(-15.543 - 0 - -5.748) / 168.127
=-0.0583

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.

Procera Networks Inc has a M-score of -2.82 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.

Procera Networks Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 2.97460.44941.73650.9351.26820.45751.08431.2027
GMI -0.30981.04811.75030.89940.71790.95540.88021.2322
AQI 4.37430.78421.11250.29870.61380.40760.372618.1591
SGI 7.50593.48641.7271.74671.00962.18491.34281.2523
DEPI 2.7720.35980.58750.9492.36031.78731.16960.5202
SGAI 0.180.46680.62370.42640.91740.74171.14991.204
LVGI 0.1562.48232.05281.15970.91030.51530.49151.3763
TATA -0.1193-1.8719-0.1035-0.199-0.1158-0.0139-0.0109-0.0305
M-score 5.87-10.06-1.52-3.10-2.87-1.96-2.304.63

Procera Networks Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.45750.44450.5730.82031.08431.25081.55841.03491.20270.8235
GMI 0.95540.94580.96280.93340.88020.97730.99551.1591.23221.1343
AQI 0.40760.37540.34370.34120.37267.687418.229619.611218.15910.9237
SGI 2.18482.07961.90141.61721.34281.23391.17911.19121.25231.2209
DEPI 1.78731.64721.24511.46351.16960.93270.70650.54240.52020.6955
SGAI 0.74180.85190.89321.02981.14981.22091.31451.26351.2041.0742
LVGI 0.51530.51870.42810.52630.49150.47741.51121.15661.37631.2791
TATA -0.0139-0.0207-0.0055-0.0243-0.0109-0.00510.0115-0.0033-0.0305-0.0583
M-score -1.96-2.15-2.15-2.31-2.300.754.955.164.63-2.82
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