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Sycamore Networks Inc (OTCPK:SCMR)
Beneish M-Score
-3.97 (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 -3.97 suggests that the company is not a manipulator.

SCMR' s 10-Year Beneish M-Score Range
Min: -21.02   Max: 73.09
Current: -3.97

-21.02
73.09

During the past 13 years, the highest Beneish M-Score of Sycamore Networks Inc was 73.09. The lowest was -21.02. And the median was -2.80.


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+0.528 * 0.9894+0.404 * 0.0361+0.892 * 0.7172+0.115 * 0.8941
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1982+4.679 * -0.0219-0.327 * 0.3211
=-3.97

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

This Year (Oct14) TTM:Last Year (Apr12) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 0 + 9.47 + 12.064 + 16.799 = $38.33 Mil.
Gross Profit was 0 + 5.449 + 7.161 + 9.62 = $22.23 Mil.
Total Current Assets was $11.93 Mil.
Total Assets was $14.53 Mil.
Property, Plant and Equipment(Net PPE) was $2.50 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.60 Mil.
Selling, General & Admin. Expense(SGA) was $15.84 Mil.
Total Current Liabilities was $0.16 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0 + -5.24 + -6.756 + -2.525 = $-14.52 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0 + -8.828 + -5.013 + -0.362 = $-14.20 Mil.
Accounts Receivable was $6.39 Mil.
Revenue was 11.922 + 13.184 + 15.38 + 12.959 = $53.45 Mil.
Gross Profit was 6.467 + 7.749 + 9.118 + 7.332 = $30.67 Mil.
Total Current Assets was $368.56 Mil.
Total Assets was $462.93 Mil.
Property, Plant and Equipment(Net PPE) was $5.28 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.83 Mil.
Selling, General & Admin. Expense(SGA) was $18.43 Mil.
Total Current Liabilities was $15.58 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)
=(0 / 38.333) / (6.387 / 53.445)
=0 / 0.11950603
=0

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)
=(5.449 / 53.445) / (0 / 38.333)
=0.57378614 / 0.57991809
=0.9894

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 - (11.926 + 2.5) / 14.527) / (1 - (368.556 + 5.281) / 462.927)
=0.00695257 / 0.19244935
=0.0361

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
=38.333 / 53.445
=0.7172

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))
=(2.83 / (2.83 + 5.281)) / (1.6 / (1.6 + 2.5))
=0.34890889 / 0.3902439
=0.8941

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)
=(15.838 / 38.333) / (18.429 / 53.445)
=0.41316881 / 0.34482178
=1.1982

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 + 0.157) / 14.527) / ((0 + 15.581) / 462.927)
=0.01080746 / 0.03365757
=0.3211

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
=(-14.521 - 0 - -14.203) / 14.527
=-0.0219

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 -3.97 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 -16.90970.26410.63470.95311.14370.94861.06860.78141.02090.9346
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 0.94981.03811.57311.10740.89580.94710.81330.9611.32070.9531
SGAI 0.84940.85930.71410.68740.97260.95461.05370.86471.33260.8613
LVGI 0.54280.89761.19540.93711.33060.53330.9971.24561.08010.9474
TATA -0.0289-0.0516-0.0424-0.0037-0.0253-0.0174-0.0422-0.0158-0.0112-0.0216
M-score -12.28-2.89-3.2335.86-2.01-2.43-1.16-2.89-3.03-2.43

Sycamore Networks Inc Quarterly Data

Jan11Apr11Jul11Oct11Jan12Apr12Jul12Oct12Jan13Oct14
DSRI 0.74470.7060.87181.7821.32951.00780.7550.59440.73090
GMI 0.95260.96241.02090.92180.91570.92930.93461.01331.02280.9894
AQI 0.09340.27040.78431.1596.0252.5711.53850.02770.02340.0361
SGI 0.84250.91090.70960.80920.87970.92211.17661.03070.94140.7172
DEPI 1.19451.2251.32071.43151.30921.20610.95310.81640.84240.8941
SGAI 1.04961.0211.33261.17391.11081.03040.86131.02871.14471.1982
LVGI 1.09390.89191.16671.07010.98241.07760.94743.03553.78440.3211
TATA -0.0238-0.0071-0.01120.0029-0.011-0.022-0.0216-0.0763-0.0614-0.0219
M-score -3.37-3.12-3.06-1.90-0.33-2.05-2.43-4.26-4.40-3.97
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