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Tellabs, Inc. (NAS:TLAB)
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.

Tellabs, Inc. has a M-score of -3.18 suggests that the company is not a manipulator.

TLAB' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 13 years, the highest Beneish M-Score of Tellabs, 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 Tellabs, 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 * 0.8747+0.528 * 1.0697+0.404 * 1.1982+0.892 * 0.7659+0.115 * 1.1867
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0398+4.679 * -0.0867-0.327 * 1.3075
=-3.18

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

This Year (Sep13) TTM:Last Year (Sep12) TTM:
Accounts Receivable was $210 Mil.
Revenue was 198.5 + 212.1 + 209.4 + 242.2 = $862 Mil.
Gross Profit was 73.8 + 80.2 + 72.3 + 93.4 = $320 Mil.
Total Current Assets was $1,122 Mil.
Total Assets was $1,519 Mil.
Property, Plant and Equipment(Net PPE) was $202 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $168 Mil.
Total Current Liabilities was $459 Mil.
Long-Term Debt was $0 Mil.
Net Income was -9.8 + -7.8 + -55.9 + -23.3 = $-97 Mil.
Non Operating Income was -1.3 + -1.2 + 1.2 + 3.1 = $2 Mil.
Cash Flow from Operations was 14.6 + -16.8 + -5.4 + 40.6 = $33 Mil.
Accounts Receivable was $313 Mil.
Revenue was 264.4 + 288.1 + 257.9 + 315.3 = $1,126 Mil.
Gross Profit was 103.6 + 114.2 + 95.7 + 133 = $447 Mil.
Total Current Assets was $1,580 Mil.
Total Assets was $2,024 Mil.
Property, Plant and Equipment(Net PPE) was $226 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $211 Mil.
Total Current Liabilities was $468 Mil.
Long-Term Debt was $0 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)
=(209.7 / 862.2) / (313 / 1125.7)
=0.24321503 / 0.27804921
=0.8747

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)
=(80.2 / 1125.7) / (73.8 / 862.2)
=0.39664209 / 0.37079564
=1.0697

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 - (1121.9 + 201.5) / 1518.6) / (1 - (1580.3 + 226.3) / 2023.7)
=0.12853944 / 0.10727875
=1.1982

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
=862.2 / 1125.7
=0.7659

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))
=(56.8 / (56.8 + 226.3)) / (41 / (41 + 201.5))
=0.20063582 / 0.16907216
=1.1867

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)
=(167.8 / 862.2) / (210.7 / 1125.7)
=0.19461842 / 0.18717243
=1.0398

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 + 459.1) / 1518.6) / ((0 + 467.9) / 2023.7)
=0.30231792 / 0.23121016
=1.3075

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
=(-96.8 - 1.8 - 33) / 1518.6
=-0.0867

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.

Tellabs, Inc. has a M-score of -3.18 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.

Tellabs, Inc. Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
DSRI 1.92890.91890.58121.37770.94041.0241.13210.92661.17780.9634
GMI 1.02310.6771.17490.99251.29790.92310.87490.90771.21611.0227
AQI 1.19341.2830.97850.92291.00950.32971.47660.93380.76411.0773
SGI 0.74441.25641.5291.08380.93740.90360.88241.07640.78290.8187
DEPI 0.97831.29220.67661.1761.09040.96541.09780.97611.02351.222
SGAI 1.09430.77620.74940.99831.00281.0911.11450.97211.11391.0041
LVGI 0.81241.86731.00411.30050.92441.19991.09071.08870.92931.2124
TATA -0.1452-0.0486-0.0224-0.0295-0.0156-0.022-0.0462-0.0532-0.0601-0.1328
M-score -2.40-2.82-2.41-2.31-2.47-3.04-2.59-2.83-2.77-3.30

Tellabs, Inc. Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
DSRI 1.20621.14961.17781.21011.02771.14670.96340.79420.91310.8747
GMI 1.15871.29951.21611.15081.03120.96951.02271.03281.06411.0697
AQI 0.99250.76460.76410.65510.67230.85411.07731.2211.15561.1982
SGI 0.94660.85210.78290.77050.78520.81510.81870.82220.78980.7659
DEPI 1.09351.03381.02350.98050.98841.10381.2221.25561.26121.1867
SGAI 1.05921.13411.11431.08741.04760.98031.00410.97921.00221.0398
LVGI 0.94470.98140.92931.12421.08270.99121.21241.18271.29411.3075
TATA -0.024-0.0858-0.0601-0.1385-0.139-0.068-0.1328-0.1087-0.0795-0.0867
M-score -2.35-2.83-2.77-3.26-3.45-2.88-3.30-3.26-3.09-3.18
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