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Richardson Electronics Ltd (NAS:RELL)
Beneish M-Score
-2.05 (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 Ltd has a M-score of -2.05 signals that the company is a manipulator.

RELL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86   Max: 3.98
Current: -2.05

-3.86
3.98

During the past 13 years, the highest Beneish M-Score of Richardson Electronics Ltd was 3.98. The lowest was -3.86. And the median was -2.38.


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 Ltd 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 * 1.0925+0.528 * 0.9861+0.404 * 1.5332+0.892 * 1+0.115 * 0.8514
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0414+4.679 * 0.0471-0.327 * 1.1925
=-2.05

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $20.9 Mil.
Revenue was 31.291 + 34.086 + 37.071 + 34.946 = $137.4 Mil.
Gross Profit was 9.75 + 10.435 + 11.262 + 10.218 = $41.7 Mil.
Total Current Assets was $133.2 Mil.
Total Assets was $164.0 Mil.
Property, Plant and Equipment(Net PPE) was $11.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.3 Mil.
Selling, General & Admin. Expense(SGA) was $50.8 Mil.
Total Current Liabilities was $20.8 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.926 + -2.286 + -1.399 + -2.221 = $-8.8 Mil.
Non Operating Income was -0.225 + 0.388 + -0.218 + -0.214 = $-0.3 Mil.
Cash Flow from Operations was -5.711 + -2.33 + -6.513 + -1.738 = $-16.3 Mil.
Accounts Receivable was $19.1 Mil.
Revenue was 33.471 + 33.841 + 34.699 + 35.383 = $137.4 Mil.
Gross Profit was 9.8 + 10.462 + 10.658 + 10.164 = $41.1 Mil.
Total Current Assets was $160.0 Mil.
Total Assets was $183.1 Mil.
Property, Plant and Equipment(Net PPE) was $9.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.5 Mil.
Selling, General & Admin. Expense(SGA) was $48.8 Mil.
Total Current Liabilities was $19.5 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)
=(20.881 / 137.394) / (19.113 / 137.394)
=0.15197898 / 0.13911088
=1.0925

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)
=(10.435 / 137.394) / (9.75 / 137.394)
=0.29902325 / 0.30325196
=0.9861

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 - (133.169 + 11.624) / 163.992) / (1 - (159.963 + 9.145) / 183.088)
=0.11707278 / 0.07635672
=1.5332

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
=137.394 / 137.394
=1

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))
=(1.525 / (1.525 + 9.145)) / (2.345 / (2.345 + 11.624))
=0.14292409 / 0.16787172
=0.8514

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)
=(50.801 / 137.394) / (48.783 / 137.394)
=0.36974686 / 0.35505917
=1.0414

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 + 20.785) / 163.992) / ((0 + 19.46) / 183.088)
=0.12674399 / 0.10628769
=1.1925

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
=(-8.832 - -0.269 - -16.292) / 163.992
=0.0471

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 Ltd has a M-score of -2.05 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.

Richardson Electronics Ltd Annual Data

May06May07May08May09May10May11May12May13May14May15
DSRI 0.9750.86721.01580.96660.78380.96470.88751.03611.02731.139
GMI 0.94961.02220.99591.08010.72421.05070.97931.00640.99060.9897
AQI 1.66330.69990.55420.60890.70515.64940.90410.71880.46943.7013
SGI 1.11831.05331.020.87330.27271.17360.99350.89380.9780.9927
DEPI 0.88540.93431.11550.81610.47211.47181.34971.17531.31090.9084
SGAI 0.95991.01210.95871.00911.43360.85350.94481.14461.07081.1401
LVGI 1.04440.89070.78821.04370.86490.55750.38441.20150.95671.3221
TATA -0.02420.1453-0.125-0.1028-0.030.27520.2473-0.0308-0.03740.0223
M-score -2.29-1.96-3.13-3.26-3.821.06-1.23-2.87-2.83-1.31

Richardson Electronics Ltd Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 1.00491.01081.02730.95720.88270.9571.1391.28851.17011.0925
GMI 0.98110.98170.99060.98160.99790.99770.98971.00041.00110.9861
AQI 0.56550.56440.46941.43752.55882.71043.70132.24081.53491.5332
SGI 0.92680.95180.9780.99090.98770.99730.99271.00671.02021
DEPI 1.37521.3171.31091.12271.02690.98360.90840.94030.85140.8514
SGAI 1.11831.12471.07081.08591.13521.13961.14011.12041.06691.0414
LVGI 0.9320.93310.95671.0931.15931.16681.32211.29231.20791.1925
TATA -0.0177-0.0145-0.0374-0.0425-0.0403-0.02270.02230.05260.04710.0471
M-score -2.76-2.73-2.83-2.59-2.23-2.02-1.31-1.58-1.97-2.05
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