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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 13 years, the highest Beneish M-Score of Telular Corporation 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 Telular Corporation 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 * 0.8397||+||0.528 * 1.0143||+||0.404 * 0.9357||+||0.892 * 1.6145||+||0.115 * 0.7172|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0493||+||4.679 * -0.0212||-||0.327 * 0.8914|
|This Year (Mar13) TTM:||Last Year (Mar12) TTM:|
|Accounts Receivable was $14.19 Mil.|
Revenue was 24.793 + 24.782 + 23.449 + 22.899 = $95.92 Mil.
Gross Profit was 13.067 + 12.423 + 12.527 + 12.125 = $50.14 Mil.
Total Current Assets was $32.54 Mil.
Total Assets was $110.36 Mil.
Property, Plant and Equipment(Net PPE) was $4.25 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.86 Mil.
Selling, General & Admin. Expense(SGA) was $28.53 Mil.
Total Current Liabilities was $15.59 Mil.
Long-Term Debt was $20.89 Mil.
Net Income was 1.854 + 2.197 + 1.621 + 1.482 = $7.15 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 2.588 + -1.04 + 4.087 + 3.862 = $9.50 Mil.
|Accounts Receivable was $10.47 Mil.
Revenue was 19.794 + 13.705 + 13.092 + 12.824 = $59.42 Mil.
Gross Profit was 10.426 + 7.514 + 6.594 + 6.969 = $31.50 Mil.
Total Current Assets was $28.71 Mil.
Total Assets was $111.81 Mil.
Property, Plant and Equipment(Net PPE) was $3.44 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.00 Mil.
Selling, General & Admin. Expense(SGA) was $16.84 Mil.
Total Current Liabilities was $14.46 Mil.
Long-Term Debt was $27.00 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)|
|=||(14.188 / 95.923)||/||(10.466 / 59.415)|
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)|
|=||(31.503 / 59.415)||/||(50.142 / 95.923)|
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 - (32.544 + 4.246) / 110.36)||/||(1 - (28.71 + 3.444) / 111.811)|
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))|
|=||(3.002 / (3.002 + 3.444))||/||(7.862 / (7.862 + 4.246))|
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)|
|=||(28.532 / 95.923)||/||(16.843 / 59.415)|
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)|
|=||((20.888 + 15.588) / 110.36)||/||((27 + 14.46) / 111.811)|
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|
|=||(7.154 - 0||-||9.497)||/||110.36|
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.
Telular Corporation has a M-score of -2.20 signals that the company is likely to 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
Telular Corporation Annual Data
Telular Corporation Quarterly Data