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Richardson Electronics (NAS:RELL)
Beneish M-Score
-2.59 (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 -2.59 suggests that the company is not a manipulator.

RELL' s 10-Year Beneish M-Score Range
Min: -3.39   Max: 4.9
Current: -2.59

-3.39
4.9

During the past 13 years, the highest Beneish M-Score of Richardson Electronics was 4.90. The lowest was -3.39. And the median was -2.45.


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 * 0.9572+0.528 * 0.9816+0.404 * 1.4375+0.892 * 0.9909+0.115 * 1.1227
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0859+4.679 * -0.0425-0.327 * 1.093
=-2.59

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $18.5 Mil.
Revenue was 34.699 + 35.383 + 32.884 + 35.436 = $138.4 Mil.
Gross Profit was 10.658 + 10.164 + 9.651 + 11.007 = $41.5 Mil.
Total Current Assets was $181.9 Mil.
Total Assets was $200.9 Mil.
Property, Plant and Equipment(Net PPE) was $7.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.2 Mil.
Selling, General & Admin. Expense(SGA) was $44.6 Mil.
Total Current Liabilities was $20.8 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -0.083 + -2.475 + -0.532 + 0.524 = $-2.6 Mil.
Non Operating Income was 0.059 + 0.023 + 0.422 + -0.001 = $0.5 Mil.
Cash Flow from Operations was -0.328 + 6.05 + -0.501 + 0.249 = $5.5 Mil.
Accounts Receivable was $19.5 Mil.
Revenue was 34.257 + 35.183 + 33.63 + 36.603 = $139.7 Mil.
Gross Profit was 10.192 + 10.247 + 9.91 + 10.742 = $41.1 Mil.
Total Current Assets was $194.1 Mil.
Total Assets was $207.8 Mil.
Property, Plant and Equipment(Net PPE) was $5.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.0 Mil.
Selling, General & Admin. Expense(SGA) was $41.5 Mil.
Total Current Liabilities was $19.7 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)
=(18.494 / 138.402) / (19.499 / 139.673)
=0.13362524 / 0.13960465
=0.9572

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)
=(10.164 / 139.673) / (10.658 / 138.402)
=0.2941943 / 0.29970665
=0.9816

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 - (181.879 + 7.723) / 200.905) / (1 - (194.067 + 5.6) / 207.8)
=0.05626042 / 0.03913859
=1.4375

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
=138.402 / 139.673
=0.9909

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))
=(1.006 / (1.006 + 5.6)) / (1.212 / (1.212 + 7.723))
=0.1522858 / 0.13564633
=1.1227

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)
=(44.609 / 138.402) / (41.456 / 139.673)
=0.32231471 / 0.29680754
=1.0859

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 + 20.826) / 200.905) / ((0 + 19.708) / 207.8)
=0.10366093 / 0.09484119
=1.093

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
=(-2.566 - 0.503 - 5.47) / 200.905
=-0.0425

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 -2.59 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 0.90540.98191.04561.01580.96661.07740.70190.88751.03611.0273
GMI 1.040.96881.02770.99591.08010.92050.82660.97931.00640.9906
AQI 0.90471.63110.68250.56840.60891.22893.24160.90410.71880.4694
SGI 1.11281.10230.87361.020.87330.99090.3230.99350.89380.978
DEPI 1.01370.8910.94561.10230.81610.97230.71471.34971.17531.3109
SGAI 1.06580.9841.05070.95871.00910.87571.39730.94481.14461.0708
LVGI 0.90841.0710.89070.78821.04370.8560.56340.38441.20150.9567
TATA -0.0714-0.02380.1349-0.0847-0.1028-0.03050.2820.2473-0.0308-0.0374
M-score -2.80-2.31-2.01-2.93-3.26-2.44-1.18-1.23-2.87-2.83

Richardson Electronics Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.4440.96731.05091.00131.03611.03311.00491.01081.02730.9572
GMI 0.87860.98941.00311.00611.00641.00030.98110.98170.99060.9816
AQI 0.90410.48760.68320.67220.71880.62570.56550.56440.46941.4375
SGI 0.61060.93310.9280.90630.89380.91910.92680.95180.9780.9909
DEPI 1.34970.9980.96921.0751.17531.3891.37521.3171.31091.1227
SGAI 1.18740.98541.0261.07961.14461.12821.11831.12471.07081.0859
LVGI 0.38440.59630.83381.00251.20151.07010.9320.93310.95671.093
TATA 0.24730.04080.0172-0.0189-0.0308-0.0458-0.0177-0.0145-0.0374-0.0425
M-score -1.16-2.46-2.50-2.79-2.87-2.89-2.76-2.73-2.83-2.59
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