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Richardson Electronics Ltd (NAS:RELL)
Beneish M-Score
-1.93 (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 -1.93 signals that the company is a manipulator.

RELL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86   Max: 1.1
Current: -1.93

-3.86
1.1

During the past 13 years, the highest Beneish M-Score of Richardson Electronics Ltd was 1.10. The lowest was -3.86. And the median was -2.31.


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 * 1.1584+0.528 * 0.9514+0.404 * 1.5396+0.892 * 1.0369+0.115 * 0.9346
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0115+4.679 * 0.0419-0.327 * 1.0204
=-1.93

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

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $24.9 Mil.
Revenue was 39.568 + 31.291 + 34.086 + 37.071 = $142.0 Mil.
Gross Profit was 13.388 + 9.75 + 10.435 + 11.262 = $44.8 Mil.
Total Current Assets was $135.9 Mil.
Total Assets was $168.1 Mil.
Property, Plant and Equipment(Net PPE) was $13.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.4 Mil.
Selling, General & Admin. Expense(SGA) was $51.6 Mil.
Total Current Liabilities was $24.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -0.155 + -2.926 + -2.286 + -1.399 = $-6.8 Mil.
Non Operating Income was -0.174 + -0.225 + 0.388 + -0.218 = $-0.2 Mil.
Cash Flow from Operations was 0.97 + -5.711 + -2.33 + -6.513 = $-13.6 Mil.
Accounts Receivable was $20.8 Mil.
Revenue was 34.946 + 33.471 + 33.841 + 34.699 = $137.0 Mil.
Gross Profit was 10.218 + 9.8 + 10.462 + 10.658 = $41.1 Mil.
Total Current Assets was $161.2 Mil.
Total Assets was $185.0 Mil.
Property, Plant and Equipment(Net PPE) was $10.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.7 Mil.
Selling, General & Admin. Expense(SGA) was $49.2 Mil.
Total Current Liabilities was $25.9 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)
=(24.928 / 142.016) / (20.753 / 136.957)
=0.17552952 / 0.15152931
=1.1584

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)
=(41.138 / 136.957) / (44.835 / 142.016)
=0.30037165 / 0.31570386
=0.9514

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 - (135.925 + 12.986) / 168.13) / (1 - (161.178 + 10.081) / 184.994)
=0.11431036 / 0.07424565
=1.5396

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
=142.016 / 136.957
=1.0369

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))
=(1.707 / (1.707 + 10.081)) / (2.381 / (2.381 + 12.986))
=0.14480828 / 0.15494241
=0.9346

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)
=(51.632 / 142.016) / (49.229 / 136.957)
=0.36356467 / 0.35944859
=1.0115

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 + 24.031) / 168.13) / ((0 + 25.912) / 184.994)
=0.14293107 / 0.14006941
=1.0204

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
=(-6.766 - -0.229 - -13.584) / 168.13
=0.0419

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 -1.93 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

May07May08May09May10May11May12May13May14May15May16
DSRI 0.86721.01580.96660.78380.96470.88751.03611.02731.1391.1584
GMI 1.02220.99591.08010.72421.05070.97931.00640.99060.98970.9514
AQI 0.69990.55420.60890.70515.64940.90410.71880.46943.70131.5396
SGI 1.05331.020.87330.27271.17360.99350.89380.9780.99271.0369
DEPI 0.93431.11550.81610.47211.47181.34971.17531.31090.90840.9346
SGAI 1.01210.95871.00911.43360.85350.94481.14461.07081.14011.0115
LVGI 0.89070.78821.04370.86490.55750.38441.20150.95671.32211.0204
TATA 0.1453-0.125-0.1028-0.030.27520.2473-0.0308-0.03740.02230.0419
M-score -1.96-3.13-3.26-3.821.06-1.23-2.87-2.83-1.31-1.93

Richardson Electronics Ltd Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 1.01081.02730.95720.88270.9571.1391.28851.17011.09251.1584
GMI 0.98170.99060.98160.99790.99770.98971.00041.00110.98610.9514
AQI 0.56440.46941.43752.55882.71043.70132.24081.53491.53321.5396
SGI 0.95180.9780.99090.98770.99730.99271.00671.020211.0369
DEPI 1.3171.31091.12271.02690.98360.90840.94030.85140.85140.9346
SGAI 1.12471.07081.08591.13521.13961.14011.12041.06691.04141.0115
LVGI 0.93310.95671.0931.15931.16681.32211.29231.20791.19251.0204
TATA -0.0145-0.0374-0.0425-0.0403-0.02270.02230.05260.04710.04710.0419
M-score -2.73-2.83-2.59-2.23-2.02-1.31-1.58-1.97-2.05-1.93
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