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TeleCommunication Systems Inc (NAS:TSYS)
Beneish M-Score
-1.82 (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 -1.82 signals that the company is a manipulator.

TSYS' s 10-Year Beneish M-Score Range
Min: -4.62   Max: -0.52
Current: -1.82

-4.62
-0.52

During the past 13 years, the highest Beneish M-Score of TeleCommunication Systems Inc was -0.52. The lowest was -4.62. And the median was -2.48.


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 * 1.6283+0.528 * 0.9354+0.404 * 0.9313+0.892 * 0.9932+0.115 * 1.1726
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9297+4.679 * 0.0236-0.327 * 0.9861
=-1.82

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $74.1 Mil.
Revenue was 93.194 + 95.332 + 86.221 + 85.09 = $359.8 Mil.
Gross Profit was 38.626 + 35.906 + 38.235 + 34.799 = $147.6 Mil.
Total Current Assets was $170.8 Mil.
Total Assets was $334.1 Mil.
Property, Plant and Equipment(Net PPE) was $33.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.1 Mil.
Selling, General & Admin. Expense(SGA) was $76.8 Mil.
Total Current Liabilities was $96.5 Mil.
Long-Term Debt was $119.9 Mil.
Net Income was -0.348 + -1.964 + 1.058 + -0.477 = $-1.7 Mil.
Non Operating Income was -1.004 + -0.891 + -0.212 + -0.031 = $-2.1 Mil.
Cash Flow from Operations was -5.892 + -4.777 + -4.545 + 7.729 = $-7.5 Mil.
Accounts Receivable was $45.8 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.



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)
=(74.051 / 359.837) / (45.789 / 362.291)
=0.2057904 / 0.12638735
=1.6283

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)
=(35.906 / 362.291) / (38.626 / 359.837)
=0.38358115 / 0.41009124
=0.9354

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 - (170.753 + 33.418) / 334.081) / (1 - (148.882 + 38.355) / 321.455)
=0.38885779 / 0.41753278
=0.9313

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
=359.837 / 362.291
=0.9932

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))
=(26.889 / (26.889 + 38.355)) / (18.11 / (18.11 + 33.418))
=0.41212985 / 0.3514594
=1.1726

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)
=(76.814 / 359.837) / (83.184 / 362.291)
=0.21346888 / 0.22960548
=0.9297

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)
=((119.85 + 96.489) / 334.081) / ((117.384 + 93.704) / 321.455)
=0.64756451 / 0.65666423
=0.9861

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
=(-1.731 - -2.138 - -7.485) / 334.081
=0.0236

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 -1.82 signals that the company is likely to 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.41290.87561.05881.13570.77690.61381.13581.11960.7421.6283
GMI 1.04251.01421.16271.01670.97291.06920.99811.08150.85690.9354
AQI 0.37311.20430.88911.6523.16690.95170.99830.81341.01290.9313
SGI 1.05411.2231.15391.5271.36321.29561.09421.14570.74330.9932
DEPI 0.95610.9861.06940.91451.21720.86331.0840.99780.8441.1726
SGAI 1.01240.91650.94450.87920.8980.91761.13190.98161.31610.9297
LVGI 1.09441.26670.80040.80061.510.90390.91111.30771.08570.9861
TATA -0.1779-0.3193-0.08850.1731-0.0549-0.126-0.048-0.3277-0.32030.0236
M-score -3.15-3.87-2.58-0.73-1.88-3.11-2.48-3.90-4.62-1.82

TeleCommunication Systems Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.03221.11961.05110.87761.05780.7420.89141.13360.98321.6283
GMI 1.12871.08151.02390.91690.86230.85690.8530.86940.90940.9354
AQI 0.79510.81340.83441.40040.98231.01290.97340.78740.96920.9313
SGI 1.17371.14571.10821.02530.87380.74330.73130.75150.82930.9932
DEPI 0.99410.99780.97420.45751.04460.8440.83561.9750.89131.1726
SGAI 1.02220.98161.01041.08881.18131.31611.26051.14681.03020.9297
LVGI 1.36111.30771.31951.00380.92151.08571.12141.06571.10430.9861
TATA -0.3624-0.3277-0.3752-0.052-0.0726-0.3203-0.2849-0.2243-0.19530.0236
M-score -4.13-3.90-4.26-2.77-2.96-4.62-4.34-3.72-3.67-1.82
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