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Richardson Electronics (NAS:RELL)
Beneish M-Score
-2.97 (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 -2.83 suggests that the company is not a manipulator.

RELL' s 10-Year Beneish M-Score Range
Min: -3.86   Max: 1.1
Current: -2.97

-3.86
1.1

During the past 13 years, the highest Beneish M-Score of Richardson Electronics was 1.10. The lowest was -3.86. And the median was -2.33.


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 * 1.0273+0.528 * 0.9906+0.404 * 0.4694+0.892 * 0.978+0.115 * 1.3109
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0708+4.679 * -0.0374-0.327 * 0.9567
=-2.83

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $18.4 Mil.
Revenue was 35.383 + 32.884 + 35.436 + 34.257 = $138.0 Mil.
Gross Profit was 10.164 + 9.651 + 11.007 + 10.192 = $41.0 Mil.
Total Current Assets was $192.2 Mil.
Total Assets was $203.5 Mil.
Property, Plant and Equipment(Net PPE) was $7.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.1 Mil.
Selling, General & Admin. Expense(SGA) was $43.5 Mil.
Total Current Liabilities was $21.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.475 + -0.532 + 0.524 + 1.968 = $-0.5 Mil.
Non Operating Income was 0.023 + 0.422 + -0.001 + 2.039 = $2.5 Mil.
Cash Flow from Operations was 6.05 + -0.501 + 0.249 + -1.185 = $4.6 Mil.
Accounts Receivable was $18.3 Mil.
Revenue was 35.183 + 33.63 + 36.603 + 35.65 = $141.1 Mil.
Gross Profit was 10.247 + 9.91 + 10.742 + 10.646 = $41.5 Mil.
Total Current Assets was $203.0 Mil.
Total Assets was $217.3 Mil.
Property, Plant and Equipment(Net PPE) was $5.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.1 Mil.
Selling, General & Admin. Expense(SGA) was $41.5 Mil.
Total Current Liabilities was $24.1 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)
=(18.354 / 137.96) / (18.268 / 141.066)
=0.13303856 / 0.12949967
=1.0273

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)
=(9.651 / 141.066) / (10.164 / 137.96)
=0.29450754 / 0.29728907
=0.9906

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 - (192.239 + 7.223) / 203.545) / (1 - (202.959 + 5.073) / 217.318)
=0.02005945 / 0.04273001
=0.4694

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
=137.96 / 141.066
=0.978

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))
=(1.057 / (1.057 + 5.073)) / (1.094 / (1.094 + 7.223))
=0.17243067 / 0.13153781
=1.3109

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)
=(43.496 / 137.96) / (41.536 / 141.066)
=0.31527979 / 0.29444374
=1.0708

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 + 21.564) / 203.545) / ((0 + 24.066) / 217.318)
=0.10594217 / 0.11074094
=0.9567

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
=(-0.515 - 2.483 - 4.613) / 203.545
=-0.0374

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 -2.83 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

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
DSRI 0.90110.88750.96731.05091.00131.03611.03311.00491.01081.0273
GMI 0.98760.97930.98941.00311.00611.00641.00030.98110.98170.9906
AQI 9.71890.90410.48760.68320.67220.71880.62570.56550.56440.4694
SGI 1.01740.99350.93310.9280.90630.89380.91910.92680.95180.978
DEPI 1.60691.34970.9980.96921.0751.17531.3891.37521.3171.3109
SGAI 0.9150.94480.98541.0261.07961.14461.12821.11831.12471.0708
LVGI 0.23980.38440.59630.83381.00251.20151.07010.9320.93310.9567
TATA 0.46180.24730.04070.0172-0.0189-0.0308-0.0458-0.0177-0.0145-0.0374
M-score 3.45-1.23-2.46-2.50-2.79-2.87-2.89-2.76-2.73-2.83
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