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Richardson Electronics Ltd (NAS:RELL)
Beneish M-Score
-2.66 (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 -2.66 suggests that the company is not a manipulator.

RELL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86   Max: 3.98
Current: -2.66

-3.86
3.98

During the past 13 years, the highest Beneish M-Score of Richardson Electronics Ltd was 3.98. The lowest was -3.86. And the median was -2.40.


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 * 0.984+0.528 * 0.9305+0.404 * 0.7696+0.892 * 0.9891+0.115 * 1.2079
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0302+4.679 * -0.0081-0.327 * 1.0331
=-2.66

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Nov16) TTM:Last Year (Nov15) TTM:
Accounts Receivable was $20.5 Mil.
Revenue was 33.827 + 33.373 + 39.568 + 31.291 = $138.1 Mil.
Gross Profit was 10.964 + 10.24 + 13.388 + 9.75 = $44.3 Mil.
Total Current Assets was $126.7 Mil.
Total Assets was $155.4 Mil.
Property, Plant and Equipment(Net PPE) was $15.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.4 Mil.
Selling, General & Admin. Expense(SGA) was $51.9 Mil.
Total Current Liabilities was $21.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.522 + -2.85 + -0.155 + -2.926 = $-8.5 Mil.
Non Operating Income was 0.164 + -0.277 + -0.174 + -0.225 = $-0.5 Mil.
Cash Flow from Operations was -0.265 + -1.675 + 0.97 + -5.711 = $-6.7 Mil.
Accounts Receivable was $21.0 Mil.
Revenue was 34.086 + 37.071 + 34.946 + 33.471 = $139.6 Mil.
Gross Profit was 10.435 + 11.262 + 10.218 + 9.8 = $41.7 Mil.
Total Current Assets was $138.8 Mil.
Total Assets was $168.8 Mil.
Property, Plant and Equipment(Net PPE) was $10.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.2 Mil.
Selling, General & Admin. Expense(SGA) was $50.9 Mil.
Total Current Liabilities was $22.4 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)
=(20.48 / 138.059) / (21.041 / 139.574)
=0.14834238 / 0.15075157
=0.984

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)
=(41.715 / 139.574) / (44.342 / 138.059)
=0.29887372 / 0.32118152
=0.9305

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 - (126.725 + 15.085) / 155.404) / (1 - (138.762 + 10.893) / 168.848)
=0.08747523 / 0.11367028
=0.7696

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
=138.059 / 139.574
=0.9891

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))
=(2.18 / (2.18 + 10.893)) / (2.416 / (2.416 + 15.085))
=0.16675591 / 0.13804925
=1.2079

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)
=(51.86 / 138.059) / (50.893 / 139.574)
=0.3756365 / 0.36463095
=1.0302

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 + 21.345) / 155.404) / ((0 + 22.449) / 168.848)
=0.13735168 / 0.1329539
=1.0331

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
=(-8.453 - -0.512 - -6.681) / 155.404
=-0.0081

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 -2.66 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 local exchange's currency.

Richardson Electronics Ltd Annual Data

May07May08May09May10May11May12May13May14May15May16
DSRI 1.00731.01580.96660.78380.96470.88751.03611.02731.1391.1584
GMI 1.02220.99591.08010.72421.05070.97931.00640.99060.98970.9514
AQI 0.6330.55420.60890.70515.64940.90410.71880.46943.70131.5396
SGI 1.05331.020.87330.27271.17360.99350.89380.9780.99271.0369
DEPI 0.99321.11550.81610.47211.47181.34971.17531.31090.90840.9346
SGAI 1.01210.95871.00911.43360.85350.94481.14461.07081.14011.0115
LVGI 0.90050.78821.04370.86490.57330.37381.20150.95671.32211.0204
TATA 0.1433-0.125-0.1015-0.030.27520.2473-0.0308-0.03740.02230.0419
M-score -1.86-3.13-3.25-3.821.05-1.23-2.87-2.83-1.31-1.93

Richardson Electronics Ltd Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
DSRI 0.95720.88270.9571.1391.28851.17011.09251.15840.90470.984
GMI 0.98160.99790.99770.98971.00041.00110.98610.95140.94580.9305
AQI 1.43752.55882.71043.70132.24081.53491.53321.53960.67970.7696
SGI 0.99090.98770.99730.99271.00671.020211.03690.99270.9891
DEPI 1.12271.02690.98360.90840.94030.85140.85140.93460.94121.2079
SGAI 1.08591.13521.13961.14011.12041.06691.04141.01151.03491.0302
LVGI 1.0931.15931.16681.32211.29231.20791.19251.02040.95681.0331
TATA -0.0425-0.0403-0.02270.02230.05260.04710.04710.04190.0051-0.0081
M-score -2.59-2.23-2.02-1.31-1.58-1.97-2.05-1.93-2.71-2.66
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