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Richardson Electronics (NAS:RELL)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

RELL' s 10-Year Beneish M-Score Range
Min: -3.86   Max: 4.2
Current: -2.8

-3.86
4.2

During the past 13 years, the highest Beneish M-Score of Richardson Electronics was 4.20. The lowest was -3.86. And the median was -2.41.


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 * 0.9366+0.528 * 0.9817+0.404 * 0.5644+0.892 * 0.9518+0.115 * 1.317
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1247+4.679 * -0.0145-0.327 * 0.9331
=-2.80

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

This Year (Feb14) TTM:Last Year (Feb13) TTM:
Accounts Receivable was $23.7 Mil.
Revenue was 32.884 + 35.436 + 34.257 + 35.183 = $137.8 Mil.
Gross Profit was 9.651 + 11.007 + 10.192 + 10.247 = $41.1 Mil.
Total Current Assets was $192.7 Mil.
Total Assets was $205.0 Mil.
Property, Plant and Equipment(Net PPE) was $6.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.1 Mil.
Selling, General & Admin. Expense(SGA) was $42.9 Mil.
Total Current Liabilities was $18.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -0.532 + 0.524 + 1.968 + -0.181 = $1.8 Mil.
Non Operating Income was 0.422 + -0.001 + 2.039 + -0.017 = $2.4 Mil.
Cash Flow from Operations was -0.501 + 0.249 + -1.185 + 3.752 = $2.3 Mil.
Accounts Receivable was $26.5 Mil.
Revenue was 33.63 + 36.603 + 35.65 + 38.857 = $144.7 Mil.
Gross Profit was 9.91 + 10.742 + 10.646 + 11.092 = $42.4 Mil.
Total Current Assets was $205.5 Mil.
Total Assets was $221.3 Mil.
Property, Plant and Equipment(Net PPE) was $4.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.1 Mil.
Selling, General & Admin. Expense(SGA) was $40.1 Mil.
Total Current Liabilities was $21.6 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)
=(23.666 / 137.76) / (26.548 / 144.74)
=0.17179152 / 0.18341854
=0.9366

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)
=(11.007 / 144.74) / (9.651 / 137.76)
=0.29286997 / 0.29832317
=0.9817

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 - (192.71 + 6.541) / 205.027) / (1 - (205.522 + 4.731) / 221.299)
=0.0281719 / 0.04991437
=0.5644

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
=137.76 / 144.74
=0.9518

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))
=(1.075 / (1.075 + 4.731)) / (1.07 / (1.07 + 6.541))
=0.18515329 / 0.14058599
=1.317

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)
=(42.92 / 137.76) / (40.096 / 144.74)
=0.31155633 / 0.27702086
=1.1247

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 + 18.676) / 205.027) / ((0 + 21.603) / 221.299)
=0.09109044 / 0.09761906
=0.9331

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
=(1.779 - 2.443 - 2.315) / 205.027
=-0.0145

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 -2.80 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

May04May05May06May07May08May09May10May11May12May13
DSRI 1.11081.09890.9750.86721.01580.96660.78380.96471.18311.0507
GMI 0.87411.05720.94961.02220.99591.08010.72421.05070.97931.0064
AQI 1.71990.68861.66330.69990.55420.60890.70515.64940.90410.7188
SGI 1.11940.91021.11831.05331.020.87330.27271.17360.99350.8938
DEPI 1.04940.97960.88540.93431.11550.81610.47211.47181.34971.1753
SGAI 0.95861.13980.95991.01210.95871.00911.43360.85350.94481.1446
LVGI 1.01460.9451.04440.89070.78821.04370.86490.55750.38441.2015
TATA -0.0228-0.0892-0.02470.1349-0.0847-0.1028-0.030.27520.2473-0.0308
M-score -2.15-2.99-2.29-2.01-2.94-3.26-3.821.06-0.96-2.85

Richardson Electronics Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
DSRI 1.18411.091.18310.93111.08711.05571.05070.93560.90420.9366
GMI 1.00470.98760.97930.98941.00311.00611.00641.00030.98110.9817
AQI 10.36849.71890.90410.48760.68320.67220.71880.62570.56550.5644
SGI 1.06831.01740.99350.93310.9280.90630.89380.91910.92680.9518
DEPI 1.86081.60691.34970.9980.96921.0751.17531.3891.37521.317
SGAI 0.90040.9150.94480.98541.0261.07961.14461.12821.11831.1247
LVGI 0.29710.23980.38440.59630.83381.00251.20151.07010.9320.9331
TATA 0.49490.46180.24730.04070.0172-0.0189-0.0308-0.0458-0.0177-0.0145
M-score 4.203.63-0.96-2.49-2.46-2.74-2.85-2.98-2.86-2.80
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