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GuruFocus has detected 3 Warning Signs with Parexel International Corp $PRXL.
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Parexel International Corp (NAS:PRXL)
Beneish M-Score
-2.47 (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.

Parexel International Corp has a M-score of -2.47 suggests that the company is not a manipulator.

PRXL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.49   Max: -0.7
Current: -2.47

-3.49
-0.7

During the past 13 years, the highest Beneish M-Score of Parexel International Corp was -0.70. The lowest was -3.49. And the median was -2.58.


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 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 * 1.2809+0.528 * 0.9534+0.404 * 1.0918+0.892 * 1.023+0.115 * 0.9437
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0291+4.679 * -0.0519-0.327 * 1.0787
=-2.47

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $641 Mil.
Revenue was 612.2 + 576.5 + 625.5 + 611.4 = $2,426 Mil.
Gross Profit was 183.5 + 169 + 189.8 + 189.3 = $732 Mil.
Total Current Assets was $1,274 Mil.
Total Assets was $2,246 Mil.
Property, Plant and Equipment(Net PPE) was $252 Mil.
Depreciation, Depletion and Amortization(DDA) was $101 Mil.
Selling, General & Admin. Expense(SGA) was $381 Mil.
Total Current Liabilities was $801 Mil.
Long-Term Debt was $757 Mil.
Net Income was 21.8 + 37.8 + 42.7 + 47.9 = $150 Mil.
Non Operating Income was -17.7 + -0.8 + -1.6 + -0.3 = $-20 Mil.
Cash Flow from Operations was 46.1 + 65.4 + 131.2 + 44.4 = $287 Mil.
Accounts Receivable was $489 Mil.
Revenue was 604.2 + 585.2 + 605.2 + 576.4 = $2,371 Mil.
Gross Profit was 186 + 168.9 + 162.9 + 164 = $682 Mil.
Total Current Assets was $1,056 Mil.
Total Assets was $1,846 Mil.
Property, Plant and Equipment(Net PPE) was $248 Mil.
Depreciation, Depletion and Amortization(DDA) was $91 Mil.
Selling, General & Admin. Expense(SGA) was $362 Mil.
Total Current Liabilities was $729 Mil.
Long-Term Debt was $458 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)
=(640.5 / 2425.6) / (488.8 / 2371)
=0.26405838 / 0.20615774
=1.2809

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)
=(681.8 / 2371) / (731.6 / 2425.6)
=0.28755799 / 0.30161609
=0.9534

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 - (1274.1 + 252.4) / 2246.4) / (1 - (1055.6 + 248.2) / 1845.5)
=0.3204683 / 0.29352479
=1.0918

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
=2425.6 / 2371
=1.023

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))
=(91.4 / (91.4 + 248.2)) / (100.7 / (100.7 + 252.4))
=0.26914016 / 0.28518833
=0.9437

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)
=(380.8 / 2425.6) / (361.7 / 2371)
=0.15699208 / 0.15255167
=1.0291

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)
=((756.9 + 801.3) / 2246.4) / ((457.9 + 728.8) / 1845.5)
=0.69364316 / 0.64302357
=1.0787

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
=(150.2 - -20.4 - 287.1) / 2246.4
=-0.0519

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 -2.47 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 local exchange's currency.

Parexel International Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.98891.15570.94350.43711.39131.70890.57090.95760.90111.0553
GMI 0.98970.96360.95570.97651.05931.10990.99410.90621.01040.953
AQI 1.36611.27061.37070.94180.94090.84611.07880.96991.15650.9712
SGI 1.20811.26671.07221.07141.06481.13771.23341.13551.02821.0412
DEPI 1.0351.11740.90990.97480.99031.0160.98160.95480.98990.957
SGAI 0.95861.00311.02431.01760.96140.89380.98111.04920.94031.0078
LVGI 1.04270.93921.24180.95240.93461.01571.18920.97690.93821.089
TATA -0.04830.0509-0.0574-0.08730.0429-0.1104-0.0518-0.0848-0.0093-0.0522
M-score -2.39-1.74-2.70-3.37-1.83-2.21-2.94-2.86-2.49-2.71

Parexel International Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.85530.81920.89710.90110.58680.7340.75961.05531.17211.2809
GMI 0.90940.92410.94781.01041.04251.04761.0180.9530.93910.9534
AQI 1.00121.04041.00361.15651.18581.09951.11820.97120.93461.0918
SGI 1.12051.07351.04631.02821.01331.02561.04141.04121.03241.023
DEPI 0.94460.9310.93740.98991.01671.0281.04340.9570.96020.9437
SGAI 1.05351.03551.0170.94030.90970.8880.91331.00781.02071.0291
LVGI 0.99220.9961.0390.93821.0771.09981.06961.0890.92011.0787
TATA -0.1122-0.0722-0.0279-0.0093-0.0352-0.0063-0.0211-0.0522-0.049-0.0519
M-score -3.09-2.96-2.71-2.49-2.92-2.68-2.71-2.71-2.56-2.47
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