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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.
RPX Corp has a M-score of -4.02 suggests that the company is not a manipulator.
During the past 5 years, the highest Beneish M-Score of RPX Corp was 0.52. The lowest was -4.09. And the median was -3.13.
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 RPX Corp 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 * 0.4406||+||0.528 * 1.1551||+||0.404 * 0.9586||+||0.892 * 1.1276||+||0.115 * 0.9971|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0595||+||4.679 * -0.2524||-||0.327 * 1.0503|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $12.4 Mil.|
Revenue was 64.293 + 61.888 + 60.275 + 58.554 = $245.0 Mil.
Gross Profit was 32.751 + 32.968 + 27.634 + 28.788 = $122.1 Mil.
Total Current Assets was $348.4 Mil.
Total Assets was $614.4 Mil.
Property, Plant and Equipment(Net PPE) was $4.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $120.1 Mil.
Selling, General & Admin. Expense(SGA) was $68.2 Mil.
Total Current Liabilities was $142.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 9.399 + 9.86 + 6.994 + 8.397 = $34.7 Mil.
Non Operating Income was 0.094 + 0.099 + 0.043 + 0.056 = $0.3 Mil.
Cash Flow from Operations was 32.178 + 68.127 + 55.947 + 33.147 = $189.4 Mil.
|Accounts Receivable was $24.9 Mil.
Revenue was 57.481 + 61.194 + 51.557 + 47.044 = $217.3 Mil.
Gross Profit was 32.787 + 37.524 + 29.742 + 25.064 = $125.1 Mil.
Total Current Assets was $298.0 Mil.
Total Assets was $542.8 Mil.
Property, Plant and Equipment(Net PPE) was $3.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $92.0 Mil.
Selling, General & Admin. Expense(SGA) was $57.0 Mil.
Total Current Liabilities was $119.6 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(12.385 / 245.01)||/||(24.928 / 217.276)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(32.968 / 217.276)||/||(32.751 / 245.01)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (348.38 + 4.391) / 614.366)||/||(1 - (298.046 + 3.639) / 542.803)|
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.
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))|
|=||(91.997 / (91.997 + 3.639))||/||(120.12 / (120.12 + 4.391))|
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)|
|=||(68.15 / 245.01)||/||(57.043 / 217.276)|
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 + 142.212) / 614.366)||/||((0 + 119.625) / 542.803)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(34.65 - 0.292||-||189.399)||/||614.366|
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.
RPX Corp has a M-score of -4.02 suggests that the company will not be a manipulator.
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
RPX Corp Annual Data
RPX Corp Quarterly Data