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TeleCommunication Systems Inc (NAS:TSYS)
Beneish M-Score
-3.67 (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 -3.67 suggests that the company is not a manipulator.

TSYS' s 10-Year Beneish M-Score Range
Min: -6.38   Max: -0.01
Current: -3.67

-6.38
-0.01

During the past 13 years, the highest Beneish M-Score of TeleCommunication Systems Inc was -0.01. The lowest was -6.38. And the median was -2.77.


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 * 0.9832+0.528 * 0.9094+0.404 * 0.9692+0.892 * 0.8293+0.115 * 0.8913
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0302+4.679 * -0.1953-0.327 * 1.1043
=-3.67

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $46.9 Mil.
Revenue was 95.332 + 86.221 + 85.09 + 78.622 = $345.3 Mil.
Gross Profit was 35.906 + 38.235 + 34.799 + 31.797 = $140.7 Mil.
Total Current Assets was $160.7 Mil.
Total Assets was $325.8 Mil.
Property, Plant and Equipment(Net PPE) was $33.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.8 Mil.
Selling, General & Admin. Expense(SGA) was $74.0 Mil.
Total Current Liabilities was $92.7 Mil.
Long-Term Debt was $116.5 Mil.
Net Income was -1.964 + 1.058 + -0.477 + -55.742 = $-57.1 Mil.
Non Operating Income was -0.891 + -0.212 + -0.031 + -0.332 = $-1.5 Mil.
Cash Flow from Operations was -4.777 + -4.545 + 7.729 + 9.567 = $8.0 Mil.
Accounts Receivable was $57.5 Mil.
Revenue was 96.033 + 92.842 + 94.794 + 132.671 = $416.3 Mil.
Gross Profit was 35.783 + 35.907 + 35.481 + 47.165 = $154.3 Mil.
Total Current Assets was $178.7 Mil.
Total Assets was $393.2 Mil.
Property, Plant and Equipment(Net PPE) was $50.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.2 Mil.
Selling, General & Admin. Expense(SGA) was $86.6 Mil.
Total Current Liabilities was $88.9 Mil.
Long-Term Debt was $139.7 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)
=(46.916 / 345.265) / (57.541 / 416.34)
=0.13588403 / 0.13820675
=0.9832

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)
=(38.235 / 416.34) / (35.906 / 345.265)
=0.37069703 / 0.40762023
=0.9094

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 - (160.729 + 33.636) / 325.833) / (1 - (178.696 + 50.795) / 393.167)
=0.40348277 / 0.41630147
=0.9692

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
=345.265 / 416.34
=0.8293

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))
=(26.194 / (26.194 + 50.795)) / (20.765 / (20.765 + 33.636))
=0.34023042 / 0.38170254
=0.8913

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)
=(73.993 / 345.265) / (86.607 / 416.34)
=0.21430785 / 0.20801989
=1.0302

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)
=((116.523 + 92.707) / 325.833) / ((139.728 + 88.902) / 393.167)
=0.64213876 / 0.58150862
=1.1043

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
=(-57.125 - -1.466 - 7.974) / 325.833
=-0.1953

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 -3.67 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 0.84361.41290.87561.05881.13570.77690.61381.13581.11960.742
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 -1.79-3.15-3.87-2.58-0.73-1.88-3.11-2.48-3.90-4.62

TeleCommunication Systems Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.91.03221.11961.05110.87761.05780.7420.89141.13360.9832
GMI 1.13631.12871.08151.02390.91690.86230.85690.8530.86940.9094
AQI 0.67780.79510.81340.83441.40040.98231.01290.97340.78740.9692
SGI 1.13311.17371.14571.10821.02530.87380.74330.73130.75150.8293
DEPI 1.00040.99410.99780.97420.45751.04460.8440.83561.9750.8913
SGAI 1.04921.02220.98161.01041.08881.18131.31611.26051.14681.0302
LVGI 1.27491.36111.30771.31951.00380.92151.08571.12141.06571.1043
TATA -0.4081-0.3624-0.3277-0.3752-0.052-0.0726-0.3203-0.2849-0.2243-0.1953
M-score -4.52-4.13-3.90-4.26-2.77-2.96-4.62-4.34-3.72-3.67
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