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Richardson Electronics (NAS:RELL)
Beneish M-Score
-2.23 (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.

Richardson Electronics has a M-score of -2.23 suggests that the company is not a manipulator.

RELL' s 10-Year Beneish M-Score Range
Min: -3.86   Max: 3.98
Current: -2.23

-3.86
3.98

During the past 13 years, the highest Beneish M-Score of Richardson Electronics was 3.98. The lowest was -3.86. And the median was -2.42.


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 Richardson Electronics 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 * 0.8827+0.528 * 0.9979+0.404 * 2.5588+0.892 * 0.9877+0.115 * 1.0269
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1352+4.679 * -0.0403-0.327 * 1.1593
=-2.23

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $17.6 Mil.
Revenue was 33.841 + 34.699 + 35.383 + 32.884 = $136.8 Mil.
Gross Profit was 10.462 + 10.658 + 10.164 + 9.651 = $40.9 Mil.
Total Current Assets was $171.5 Mil.
Total Assets was $194.3 Mil.
Property, Plant and Equipment(Net PPE) was $8.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.4 Mil.
Selling, General & Admin. Expense(SGA) was $46.8 Mil.
Total Current Liabilities was $21.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -1.057 + -0.083 + -2.475 + -0.532 = $-4.1 Mil.
Non Operating Income was -0.033 + 0.059 + 0.023 + 0.422 = $0.5 Mil.
Cash Flow from Operations was -2.008 + -0.328 + 6.05 + -0.501 = $3.2 Mil.
Accounts Receivable was $20.2 Mil.
Revenue was 35.436 + 34.257 + 35.183 + 33.63 = $138.5 Mil.
Gross Profit was 11.007 + 10.192 + 10.247 + 9.91 = $41.4 Mil.
Total Current Assets was $194.8 Mil.
Total Assets was $206.7 Mil.
Property, Plant and Equipment(Net PPE) was $5.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.0 Mil.
Selling, General & Admin. Expense(SGA) was $41.7 Mil.
Total Current Liabilities was $19.6 Mil.
Long-Term Debt was $0.0 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)
=(17.625 / 136.807) / (20.216 / 138.506)
=0.12883113 / 0.14595758
=0.8827

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)
=(10.658 / 138.506) / (10.462 / 136.807)
=0.29858634 / 0.29921715
=0.9979

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 - (171.546 + 8.352) / 194.286) / (1 - (194.779 + 5.935) / 206.696)
=0.07405577 / 0.02894105
=2.5588

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
=136.807 / 138.506
=0.9877

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))
=(1.013 / (1.013 + 5.935)) / (1.382 / (1.382 + 8.352))
=0.14579735 / 0.14197658
=1.0269

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)
=(46.757 / 136.807) / (41.701 / 138.506)
=0.34177345 / 0.30107721
=1.1352

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 + 21.385) / 194.286) / ((0 + 19.624) / 206.696)
=0.11006969 / 0.09494136
=1.1593

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
=(-4.147 - 0.471 - 3.213) / 194.286
=-0.0403

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.

Richardson Electronics has a M-score of -2.23 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.

Richardson Electronics Annual Data

May05May06May07May08May09May10May11May12May13May14
DSRI 1.09890.9750.86721.01580.96660.78380.96470.88751.03611.0273
GMI 1.05720.94961.02220.99591.08010.72421.05070.97931.00640.9906
AQI 0.68861.66330.69990.55420.60890.70515.64940.90410.71880.4694
SGI 0.91021.11831.05331.020.87330.27271.17360.99350.89380.978
DEPI 0.97960.88540.93431.11550.81610.47211.47181.34971.17531.3109
SGAI 1.13980.95991.01210.95871.00911.43360.85350.94481.14461.0708
LVGI 0.9451.04440.89070.78821.04370.86490.55750.38441.20150.9567
TATA -0.0892-0.02470.1349-0.0847-0.1028-0.030.27520.2473-0.0308-0.0374
M-score -2.99-2.29-2.01-2.94-3.26-3.821.06-1.23-2.87-2.83

Richardson Electronics Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 0.96731.05091.00131.03611.03311.00491.01081.02730.95720.8827
GMI 0.98941.00311.00611.00641.00030.98110.98170.99060.98160.9979
AQI 0.48760.68320.67220.71880.62570.56550.56440.46941.43752.5588
SGI 0.93310.9280.90630.89380.91910.92680.95180.9780.99090.9877
DEPI 0.9980.96921.0751.17531.3891.37521.3171.31091.12271.0269
SGAI 0.98541.0261.07961.14461.12821.11831.12471.07081.08591.1352
LVGI 0.59630.83381.00251.20151.07010.9320.93310.95671.0931.1593
TATA 0.04070.0172-0.0189-0.0308-0.0458-0.0177-0.0145-0.0374-0.0425-0.0403
M-score -2.46-2.50-2.79-2.87-2.89-2.76-2.73-2.83-2.59-2.23
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