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Sycamore Networks Inc (OTCPK:SCMR)
Beneish M-Score
0.00 (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.

Sycamore Networks Inc has a M-score of -3.06 suggests that the company is not a manipulator.

During the past 14 years, the highest Beneish M-Score of Sycamore Networks Inc was 0.00. The lowest was 0.00. And the median was 0.00.


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 Sycamore Networks Inc 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 * 0.8718+0.528 * 1.0209+0.404 * 0.7843+0.892 * 0.7096+0.115 * 1.3207
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3326+4.679 * -0.0112-0.327 * 1.1667
=-3.06

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

This Year (Jul11) TTM:Last Year (Jul10) TTM:
Accounts Receivable was $8.76 Mil.
Revenue was $48.69 Mil.
Gross Profit was $26.18 Mil.
Total Current Assets was $418.68 Mil.
Total Assets was $469.74 Mil.
Property, Plant and Equipment(Net PPE) was $5.98 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.56 Mil.
Selling, General & Admin. Expense(SGA) was $18.95 Mil.
Total Current Liabilities was $17.47 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was $-17.80 Mil.
Non Operating Income was $0.00 Mil.
Cash Flow from Operations was $-12.53 Mil.
Accounts Receivable was $14.17 Mil.
Revenue was $68.62 Mil.
Gross Profit was $37.66 Mil.
Total Current Assets was $582.35 Mil.
Total Assets was $671.02 Mil.
Property, Plant and Equipment(Net PPE) was $6.57 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.39 Mil.
Selling, General & Admin. Expense(SGA) was $20.04 Mil.
Total Current Liabilities was $21.39 Mil.
Long-Term Debt was $0.00 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)
=(8.764 / 48.688) / (14.168 / 68.617)
=0.18000329 / 0.20647944
=0.8718

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)
=(37.663 / 68.617) / (26.178 / 48.688)
=0.5488873 / 0.53766842
=1.0209

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 - (418.683 + 5.978) / 469.737) / (1 - (582.354 + 6.569) / 671.02)
=0.09596008 / 0.12234658
=0.7843

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
=48.688 / 68.617
=0.7096

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))
=(6.393 / (6.393 + 6.569)) / (3.563 / (3.563 + 5.978))
=0.49321092 / 0.37344094
=1.3207

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)
=(18.949 / 48.688) / (20.04 / 68.617)
=0.38919241 / 0.2920559
=1.3326

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 + 17.466) / 469.737) / ((0 + 21.385) / 671.02)
=0.03718251 / 0.03186939
=1.1667

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
=(-17.798 - 0 - -12.528) / 469.737
=-0.0112

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.

Sycamore Networks Inc has a M-score of -3.06 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.

Sycamore Networks Inc Annual Data

Jul03Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12
DSRI 1.00820.84610.53821.25831.21320.38862.51181.08150.87180.755
GMI -16.2060.23910.720.96811.14370.94861.06860.78141.02090.9346
AQI 0.95651.3910.003494.46560.34512.96562.21250.38850.78431.5385
SGI 0.58731.16381.46891.33561.78550.74010.58321.01870.70961.1766
DEPI 0.94981.17051.47221.04940.89580.94710.81330.9611.32070.9531
SGAI 0.84480.96570.52481.05420.97260.95461.05370.86471.33260.8613
LVGI 0.54280.89761.19540.93711.33060.53330.92941.2371.16670.9474
TATA -0.0055-0.0119-0.0152-0.0044-0.0399-0.0174-0.0422-0.0158-0.0112-0.0216
M-score -11.80-2.72-3.0435.80-2.07-2.43-1.14-2.88-3.06-2.43
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