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Peerless Systems Corporation (NAS:PRLS)
Beneish M-Score
-2.69 (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.

Peerless Systems Corporation has a M-score of signals that the company is a manipulator.

PRLS' s 10-Year Beneish M-Score Range
Min: -5.88   Max: 6.43
Current: -2.69

-5.88
6.43

During the past 13 years, the highest Beneish M-Score of Peerless Systems Corporation was 6.43. The lowest was -5.88. And the median was -2.68.


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 Peerless Systems Corporation 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Oct13) TTM:Last Year (Oct12) TTM:
Accounts Receivable was $ Mil.
Revenue was + + + = $ Mil.
Gross Profit was + + + = $ Mil.
Total Current Assets was $ Mil.
Total Assets was $ Mil.
Property, Plant and Equipment(Net PPE) was $ Mil.
Depreciation, Depletion and Amortization(DDA) was $ Mil.
Selling, General & Admin. Expense(SGA) was $ Mil.
Total Current Liabilities was $ Mil.
Long-Term Debt was $ Mil.
Net Income was + + + = $ Mil.
Non Operating Income was + + + = $ Mil.
Cash Flow from Operations was + + + = $ Mil.
Accounts Receivable was $ Mil.
Revenue was 0.482 + 0.451 + 0.614 + 0.744 = $ Mil.
Gross Profit was + + + = $ Mil.
Total Current Assets was $ Mil.
Total Assets was $ Mil.
Property, Plant and Equipment(Net PPE) was $ Mil.
Depreciation, Depletion and Amortization(DDA) was $ Mil.
Selling, General & Admin. Expense(SGA) was $ Mil.
Total Current Liabilities was $ Mil.
Long-Term Debt was $ 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)
=( / ) / ( / 2.291)
= /
=

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)
=( / 2.291) / ( / )
= /
=

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 - ( + 0) / ) / (1 - ( + 0) / )
= /
=

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
= / 2.291
=

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))
=(0 / (0 + 0)) / (0 / (0 + 0))
= /
=

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)
=( / ) / ( / 2.291)
= /
=

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)
=(( + ) / ) / (( + ) / )
= /
=

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
=( - - ) /
=

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.

Peerless Systems Corporation has a M-score of 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.

Peerless Systems Corporation Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13
DSRI 3.6750.53221.10191.20880.73963.02710.73191.17581.06171
GMI 1.04930.95571.16960.91260.8882.16820.24431.76170.87231
AQI 0.49460.92420.17350.70661.08540.00266.40975.53260.31711
SGI 0.79520.91381.56670.92330.8520.36590.46541.2730.59211
DEPI 1.0040.77110.8920.96260.86360.84051.14911.14140.651
SGAI 1.16151.0060.70161.17331.17672.45860.80180.8071.24221
LVGI 1.3691.23260.85630.75540.49980.73990.51851.41041.2631
TATA 0.1715-0.2449-0.0906-0.02340.07280.4949-0.0342-0.2758-0.0557-0.0557
M-score 0.27-4.29-2.46-2.58-2.421.16-1.37-1.22-3.56-2.74

Peerless Systems Corporation Quarterly Data

Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13
DSRI 0.37740.49231.06171.36613.99851.45351111
GMI 1.07260.97130.87190.84050.87340.93681111
AQI 2.5682.48430.31710.8160.78750.85541111
SGI 1.88640.850.59210.52090.55250.7991111
DEPI 0.71830.65570.651111111
SGAI 0.45270.96261.24181.61421.58781.21771111
LVGI 1.94460.62671.2631.35752.53363.5641111
TATA -0.0319-0.0488-0.0556-0.0556-0.0556-0.0556-0.0556-0.0556-0.0556-0.0556
M-score -1.99-2.64-3.56-3.21-1.14-3.47-2.74-2.74-2.74-2.74
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