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Procera Networks Inc (NAS:PKT)
Beneish M-Score
-2.75 (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 -2.75 suggests that the company is not a manipulator.

PKT' s 10-Year Beneish M-Score Range
Min: -13.61   Max: 39.51
Current: -2.75

-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 * 0.8861+0.528 * 1.1334+0.404 * 0.9581+0.892 * 1.2038+0.115 * 0.88
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9336+4.679 * -0.0807-0.327 * 1.0701
=-2.75

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $18.31 Mil.
Revenue was 20.608 + 14.541 + 21.33 + 21.333 = $77.81 Mil.
Gross Profit was 11.743 + 8.384 + 12.363 + 10.357 = $42.85 Mil.
Total Current Assets was $144.69 Mil.
Total Assets was $171.59 Mil.
Property, Plant and Equipment(Net PPE) was $7.60 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.69 Mil.
Selling, General & Admin. Expense(SGA) was $39.81 Mil.
Total Current Liabilities was $22.57 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -1.408 + -5.976 + -3.302 + -2.983 = $-13.67 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.289 + 0.475 + -0.052 + -1.539 = $0.17 Mil.
Accounts Receivable was $17.17 Mil.
Revenue was 17.839 + 14.171 + 16.569 + 16.061 = $64.64 Mil.
Gross Profit was 10.725 + 7.369 + 10.727 + 11.521 = $40.34 Mil.
Total Current Assets was $152.13 Mil.
Total Assets was $178.68 Mil.
Property, Plant and Equipment(Net PPE) was $5.57 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.25 Mil.
Selling, General & Admin. Expense(SGA) was $35.42 Mil.
Total Current Liabilities was $21.96 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)
=(18.311 / 77.812) / (17.166 / 64.64)
=0.2353236 / 0.26556312
=0.8861

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)
=(8.384 / 64.64) / (11.743 / 77.812)
=0.62410272 / 0.55064772
=1.1334

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 - (144.687 + 7.604) / 171.591) / (1 - (152.133 + 5.574) / 178.683)
=0.11247676 / 0.11739225
=0.9581

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
=77.812 / 64.64
=1.2038

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))
=(2.248 / (2.248 + 5.574)) / (3.688 / (3.688 + 7.604))
=0.28739453 / 0.3266029
=0.88

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)
=(39.808 / 77.812) / (35.423 / 64.64)
=0.51159204 / 0.54800433
=0.9336

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 + 22.569) / 171.591) / ((0 + 21.963) / 178.683)
=0.13152788 / 0.122916
=1.0701

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
=(-13.669 - 0 - 0.173) / 171.591
=-0.0807

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 -2.75 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 4.37430.78421.11250.29870.61380.4080.372218.1591
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 0.15312.48232.05281.22620.86090.51530.49151.3763
TATA -0.1193-1.8719-0.1035-0.199-0.1158-0.0139-0.0109-0.0305
M-score 5.88-10.06-1.52-3.12-2.86-1.96-2.304.63

Procera Networks Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.44450.5730.82031.08431.25081.55841.03491.20270.82350.8861
GMI 0.94580.96280.93340.88020.97730.99551.1591.23221.13431.1334
AQI 0.37540.34370.34120.37227.687418.229619.611218.15910.92370.9581
SGI 2.07961.90141.61721.34281.23391.17911.19121.25231.22091.2038
DEPI 1.64721.24511.46351.16960.93270.70650.54240.52020.69550.88
SGAI 0.85180.89321.02991.14991.2211.31451.26351.2041.07420.9336
LVGI 0.51870.42810.52630.49150.47741.51121.15661.37631.27911.0701
TATA -0.0207-0.0055-0.0243-0.0109-0.00510.0115-0.0033-0.0305-0.0583-0.0807
M-score -2.15-2.15-2.31-2.300.754.955.164.63-2.82-2.75
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