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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.
Radisys Corp has a M-score of -3.58 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Radisys Corp was 2.88. The lowest was -5.54. And the median was -2.62.
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 Radisys 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 * 1.4451||+||0.528 * 1.1942||+||0.404 * 0.8117||+||0.892 * 0.7426||+||0.115 * 0.899|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2073||+||4.679 * -0.2573||-||0.327 * 1.1703|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $51.8 Mil.|
Revenue was 49.964 + 43.799 + 50.138 + 54.109 = $198.0 Mil.
Gross Profit was 12.007 + 11.148 + 10.853 + 14.166 = $48.2 Mil.
Total Current Assets was $114.1 Mil.
Total Assets was $180.1 Mil.
Property, Plant and Equipment(Net PPE) was $12.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.0 Mil.
Selling, General & Admin. Expense(SGA) was $39.1 Mil.
Total Current Liabilities was $90.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -8.211 + -10.434 + -26.015 + -12.72 = $-57.4 Mil.
Non Operating Income was 0.157 + 0.17 + 0.962 + 0.199 = $1.5 Mil.
Cash Flow from Operations was -2.118 + -3.204 + -5.996 + -1.195 = $-12.5 Mil.
|Accounts Receivable was $48.3 Mil.
Revenue was 65.438 + 68.178 + 69.3 + 63.725 = $266.6 Mil.
Gross Profit was 19.464 + 19.655 + 20.7 + 17.648 = $77.5 Mil.
Total Current Assets was $116.6 Mil.
Total Assets was $211.0 Mil.
Property, Plant and Equipment(Net PPE) was $16.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.1 Mil.
Selling, General & Admin. Expense(SGA) was $43.7 Mil.
Total Current Liabilities was $72.4 Mil.
Long-Term Debt was $18.0 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)|
|=||(51.835 / 198.01)||/||(48.302 / 266.641)|
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)|
|=||(11.148 / 266.641)||/||(12.007 / 198.01)|
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 - (114.137 + 12.346) / 180.143)||/||(1 - (116.611 + 16.933) / 210.957)|
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))|
|=||(22.077 / (22.077 + 16.933))||/||(20.978 / (20.978 + 12.346))|
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)|
|=||(39.136 / 198.01)||/||(43.65 / 266.641)|
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 + 90.365) / 180.143)||/||((18 + 72.425) / 210.957)|
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|
|=||(-57.38 - 1.488||-||-12.513)||/||180.143|
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.
Radisys Corp has a M-score of -3.58 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
Radisys Corp Annual Data
Radisys Corp Quarterly Data