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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.
Parexel International Corp has a M-score of -2.92 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Parexel International Corp was -1.13. The lowest was -3.18. And the median was -2.52.
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 Parexel International Corp 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 * 0.8971||+||0.528 * 0.9062||+||0.404 * 0.9699||+||0.892 * 1.1355||+||0.115 * 0.9546|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0492||+||4.679 * -0.0848||-||0.327 * 0.9769|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $723 Mil.|
Revenue was 585.124 + 577.918 + 574.236 + 529.064 = $2,266 Mil.
Gross Profit was 182.267 + 169.226 + 162.638 + 146.051 = $660 Mil.
Total Current Assets was $1,122 Mil.
Total Assets was $1,834 Mil.
Property, Plant and Equipment(Net PPE) was $234 Mil.
Depreciation, Depletion and Amortization(DDA) was $81 Mil.
Selling, General & Admin. Expense(SGA) was $380 Mil.
Total Current Liabilities was $771 Mil.
Long-Term Debt was $334 Mil.
Net Income was 40.072 + 34.739 + 28.329 + 25.954 = $129 Mil.
Non Operating Income was -0.855 + -0.292 + -1.201 + -0.201 = $-3 Mil.
Cash Flow from Operations was 98.502 + 76.362 + 149.474 + -37.137 = $287 Mil.
|Accounts Receivable was $709 Mil.
Revenue was 526.858 + 523.451 + 483.137 + 462.52 = $1,996 Mil.
Gross Profit was 148.238 + 142.576 + 120.743 + 115.349 = $527 Mil.
Total Current Assets was $1,077 Mil.
Total Assets was $1,780 Mil.
Property, Plant and Equipment(Net PPE) was $224 Mil.
Depreciation, Depletion and Amortization(DDA) was $73 Mil.
Selling, General & Admin. Expense(SGA) was $319 Mil.
Total Current Liabilities was $674 Mil.
Long-Term Debt was $424 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(722.623 / 2266.342)||/||(709.445 / 1995.966)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(169.226 / 1995.966)||/||(182.267 / 2266.342)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1122.132 + 234.164) / 1834)||/||(1 - (1077.457 + 224.225) / 1779.624)|
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.
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))|
|=||(73.186 / (73.186 + 224.225))||/||(81.328 / (81.328 + 234.164))|
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)|
|=||(379.8 / 2266.342)||/||(318.806 / 1995.966)|
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)|
|=||((334.443 + 771.232) / 1834)||/||((424.074 + 674.228) / 1779.624)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(129.094 - -2.549||-||287.201)||/||1834|
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.
Parexel International Corp has a M-score of -2.92 suggests that the company will not be a manipulator.
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
Parexel International Corp Annual Data
Parexel International Corp Quarterly Data