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Richardson Electronics (NAS:RELL)
Beneish M-Score
-1.31 (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 -1.31 signals that the company is a manipulator.

RELL' s 10-Year Beneish M-Score Range
Min: -3.86   Max: 1.1
Current: -1.31

-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 -2.29.


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 * 1.139+0.528 * 0.9897+0.404 * 3.7013+0.892 * 0.9927+0.115 * 0.9084
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1401+4.679 * 0.0223-0.327 * 1.3221
=-1.31

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

This Year (May15) TTM:Last Year (May14) TTM:
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.
Net Income was -2.221 + -2.198 + -1.057 + -0.083 = $-5.6 Mil.
Non Operating Income was -0.214 + 0.281 + -0.033 + 0.059 = $0.1 Mil.
Cash Flow from Operations was -1.738 + -5.706 + -2.008 + -0.328 = $-9.8 Mil.
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.



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)
=(20.753 / 136.957) / (18.354 / 137.96)
=0.15152931 / 0.13303856
=1.139

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)
=(9.8 / 137.96) / (10.218 / 136.957)
=0.29728907 / 0.30037165
=0.9897

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 - (161.178 + 10.081) / 184.994) / (1 - (192.239 + 7.223) / 203.545)
=0.07424565 / 0.02005945
=3.7013

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
=136.957 / 137.96
=0.9927

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))
=(1.094 / (1.094 + 7.223)) / (1.707 / (1.707 + 10.081))
=0.13153781 / 0.14480828
=0.9084

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)
=(49.229 / 136.957) / (43.496 / 137.96)
=0.35944859 / 0.31527979
=1.1401

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 + 25.912) / 184.994) / ((0 + 21.564) / 203.545)
=0.14006941 / 0.10594217
=1.3221

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
=(-5.559 - 0.093 - -9.78) / 184.994
=0.0223

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 -1.31 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 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 -0.02470.1349-0.0847-0.1028-0.030.27520.2473-0.0308-0.03740.0223
M-score -2.29-2.01-2.94-3.26-3.821.06-1.23-2.87-2.83-1.31

Richardson Electronics Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.00131.03611.03311.00491.01081.02730.95720.88270.9571.139
GMI 1.00611.00641.00030.98110.98170.99060.98160.99790.99770.9897
AQI 0.67220.71880.62570.56550.56440.46941.43752.55882.71043.7013
SGI 0.90630.89380.91910.92680.95180.9780.99090.98770.99730.9927
DEPI 1.0751.17531.3891.37521.3171.31091.12271.02690.98360.9084
SGAI 1.07961.14461.12821.11831.12471.07081.08591.13521.13961.1401
LVGI 1.00251.20151.07010.9320.93310.95671.0931.15931.16681.3221
TATA -0.0189-0.0308-0.0458-0.0177-0.0145-0.0374-0.0425-0.0403-0.02270.0223
M-score -2.79-2.87-2.89-2.76-2.73-2.83-2.59-2.23-2.02-1.31
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