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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.
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.
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|
|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
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)|
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)|
|=||(37.663 / 68.617)||/||(26.178 / 48.688)|
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 - (418.683 + 5.978) / 469.737)||/||(1 - (582.354 + 6.569) / 671.02)|
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))|
|=||(6.393 / (6.393 + 6.569))||/||(3.563 / (3.563 + 5.978))|
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)|
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)|
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|
|=||(-17.798 - 0||-||-12.528)||/||469.737|
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.
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
Sycamore Networks Inc Annual Data