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Procera Networks Inc (NAS:PKT)
Beneish M-Score
-3.67 (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 -3.67 suggests that the company is not a manipulator.

PKT' s 10-Year Beneish M-Score Range
Min: -10.06   Max: 18.98
Current: -3.67

-10.06
18.98

During the past 13 years, the highest Beneish M-Score of Procera Networks Inc was 18.98. The lowest was -10.06. And the median was -2.59.


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 * 0.8492+0.528 * 0.9324+0.404 * 0.2366+0.892 * 1.0099+0.115 * 1.0344
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.949+4.679 * -0.1501-0.327 * 1.0872
=-3.67

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $21.45 Mil.
Revenue was 24.155 + 16.109 + 20.608 + 14.541 = $75.41 Mil.
Gross Profit was 13.862 + 10.217 + 11.743 + 8.384 = $44.21 Mil.
Total Current Assets was $143.68 Mil.
Total Assets was $156.07 Mil.
Property, Plant and Equipment(Net PPE) was $8.32 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.81 Mil.
Selling, General & Admin. Expense(SGA) was $39.57 Mil.
Total Current Liabilities was $24.26 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -1.72 + -15.712 + -1.408 + -5.976 = $-24.82 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.102 + -4.259 + 1.289 + 0.475 = $-1.39 Mil.
Accounts Receivable was $25.01 Mil.
Revenue was 21.33 + 21.333 + 17.839 + 14.171 = $74.67 Mil.
Gross Profit was 12.363 + 10.357 + 10.725 + 7.369 = $40.81 Mil.
Total Current Assets was $152.54 Mil.
Total Assets was $179.44 Mil.
Property, Plant and Equipment(Net PPE) was $7.12 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.43 Mil.
Selling, General & Admin. Expense(SGA) was $41.29 Mil.
Total Current Liabilities was $25.66 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)
=(21.447 / 75.413) / (25.008 / 74.673)
=0.28439394 / 0.33490016
=0.8492

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)
=(10.217 / 74.673) / (13.862 / 75.413)
=0.54656971 / 0.58618541
=0.9324

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 - (143.678 + 8.322) / 156.071) / (1 - (152.535 + 7.121) / 179.436)
=0.02608428 / 0.11023429
=0.2366

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
=75.413 / 74.673
=1.0099

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))
=(3.427 / (3.427 + 7.121)) / (3.811 / (3.811 + 8.322))
=0.32489571 / 0.31410204
=1.0344

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)
=(39.57 / 75.413) / (41.287 / 74.673)
=0.52471059 / 0.55290399
=0.949

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 + 24.263) / 156.071) / ((0 + 25.659) / 179.436)
=0.1554613 / 0.14299806
=1.0872

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
=(-24.816 - 0 - -1.393) / 156.071
=-0.1501

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 -3.67 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 17.18650.44941.73650.9351.26820.45751.08431.20270.8492
GMI -0.30981.04811.75030.89940.71790.95540.88021.23220.9324
AQI 4.37430.78421.11250.29870.61380.40760.372618.15910.2366
SGI 7.50593.48641.7271.74671.00962.18491.34281.25231.0099
DEPI 2.7720.35980.58750.9492.36031.78731.16960.52021.0344
SGAI 0.180.46680.62370.42640.91740.74171.14991.2040.949
LVGI 0.1562.48232.05281.15970.91030.51530.49151.37631.0872
TATA -0.1193-1.8719-0.1035-0.199-0.1158-0.0139-0.0109-0.0305-0.1501
M-score 18.95-10.06-1.52-3.10-2.87-1.96-2.304.63-3.67

Procera Networks Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.82031.08431.25081.55841.03491.20270.82350.88610.94630.8492
GMI 0.93340.88020.97730.99551.1591.23221.13431.13340.95250.9324
AQI 0.34120.37267.687418.229619.611218.15910.92370.95810.28780.2366
SGI 1.61721.34281.23391.17911.19121.25231.22091.20381.03831.0099
DEPI 1.46351.16960.93270.70650.54240.52020.69550.880.94641.0344
SGAI 1.02981.14981.22091.31451.26351.2041.07420.93360.98670.949
LVGI 0.52630.49150.47741.51121.15661.37631.27911.07011.17381.0872
TATA -0.0243-0.0109-0.00510.0115-0.0033-0.0305-0.0583-0.0807-0.1546-0.1501
M-score -2.31-2.300.754.955.164.63-2.82-2.75-3.59-3.67
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