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TeleCommunication Systems, Inc. (NAS:TSYS)
Beneish M-Score
-4.58 (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.

TeleCommunication Systems, Inc. has a M-score of -4.58 suggests that the company is not a manipulator.

TSYS' s 10-Year Beneish M-Score Range
Min: -4.58   Max: -0.15
Current: -4.58

-4.58
-0.15

During the past 13 years, the highest Beneish M-Score of TeleCommunication Systems, Inc. was -0.15. The lowest was -4.58. And the median was -2.67.


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 TeleCommunication Systems, 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 * 0.7835+0.528 * 0.8569+0.404 * 1.0129+0.892 * 0.7433+0.115 * 0.844
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3161+4.679 * -0.3203-0.327 * 1.0857
=-4.58

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $61.8 Mil.
Revenue was 78.622 + 96.033 + 92.842 + 94.794 = $362.3 Mil.
Gross Profit was 31.797 + 35.783 + 35.907 + 35.481 = $139.0 Mil.
Total Current Assets was $148.9 Mil.
Total Assets was $321.5 Mil.
Property, Plant and Equipment(Net PPE) was $38.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.9 Mil.
Selling, General & Admin. Expense(SGA) was $83.2 Mil.
Total Current Liabilities was $93.7 Mil.
Long-Term Debt was $117.4 Mil.
Net Income was -55.742 + -0.155 + -1.871 + -0.829 = $-58.6 Mil.
Non Operating Income was -0.332 + -1.643 + -1.453 + -0.392 = $-3.8 Mil.
Cash Flow from Operations was 9.567 + 7.206 + 12.13 + 19.29 = $48.2 Mil.
Accounts Receivable was $106.1 Mil.
Revenue was 132.671 + 140.056 + 114.622 + 100.035 = $487.4 Mil.
Gross Profit was 47.165 + 44.126 + 34.526 + 34.39 = $160.2 Mil.
Total Current Assets was $193.9 Mil.
Total Assets was $413.7 Mil.
Property, Plant and Equipment(Net PPE) was $49.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.3 Mil.
Selling, General & Admin. Expense(SGA) was $85.0 Mil.
Total Current Liabilities was $111.3 Mil.
Long-Term Debt was $138.9 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)
=(61.798 / 362.291) / (106.108 / 487.384)
=0.17057559 / 0.21770924
=0.7835

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)
=(35.783 / 487.384) / (31.797 / 362.291)
=0.32870796 / 0.38358115
=0.8569

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 - (148.882 + 38.355) / 321.455) / (1 - (193.897 + 49.27) / 413.712)
=0.41753278 / 0.41223121
=1.0129

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
=362.291 / 487.384
=0.7433

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))
=(26.279 / (26.279 + 49.27)) / (26.889 / (26.889 + 38.355))
=0.34784047 / 0.41212985
=0.844

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)
=(83.184 / 362.291) / (85.03 / 487.384)
=0.22960548 / 0.17446203
=1.3161

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)
=((117.384 + 93.704) / 321.455) / ((138.939 + 111.293) / 413.712)
=0.65666423 / 0.60484588
=1.0857

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
=(-58.597 - -3.82 - 48.193) / 321.455
=-0.3203

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.

TeleCommunication Systems, Inc. has a M-score of -4.58 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.

TeleCommunication Systems, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.92090.91730.87561.05881.5360.96850.59031.03880.96510.7835
GMI 0.74991.04251.01421.16271.01670.97291.06920.99811.08150.8569
AQI 4.61450.37311.20430.88911.6523.16690.95170.99830.81341.0129
SGI 1.05261.05411.2231.15391.5271.36321.29561.09421.14570.7433
DEPI 1.60920.95610.9861.06940.91451.21720.86331.0840.99780.844
SGAI 1.05081.01240.91650.94450.87920.8980.91761.13190.98161.3161
LVGI 0.96161.09441.26670.80040.80061.510.90390.91111.30771.0857
TATA -0.1319-0.1779-0.3193-0.08850.1731-0.0549-0.126-0.048-0.3277-0.3203
M-score -1.72-3.61-3.87-2.58-0.36-1.71-3.14-2.57-4.05-4.58

TeleCommunication Systems, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.96031.03880.91960.86870.83980.96510.84080.9090.95340.7835
GMI 0.98290.99811.06031.13631.12871.08151.02390.91690.86230.8569
AQI 1.10.99830.92660.67780.79510.81340.83441.40040.98231.0129
SGI 1.07571.09421.12061.13311.17371.14571.10821.02530.87380.7433
DEPI 1.01371.0841.1121.00040.99410.99780.97420.45751.04460.844
SGAI 1.03321.13191.07271.04921.02220.98161.01041.08881.18131.3161
LVGI 0.8360.91110.93111.27491.36111.30771.31951.00380.92151.0857
TATA -0.0424-0.048-0.0654-0.4081-0.3624-0.3277-0.3752-0.052-0.0726-0.3203
M-score -2.57-2.57-2.73-4.55-4.31-4.05-4.45-2.75-3.06-4.58
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