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Westell Technologies Inc (NAS:WSTL)
Beneish M-Score
-4.19 (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.

Westell Technologies Inc has a M-score of -4.19 suggests that the company is not a manipulator.

WSTL' s Beneish M-Score Range Over the Past 10 Years
Min: -5.46   Max: 2.27
Current: -4.19

-5.46
2.27

During the past 13 years, the highest Beneish M-Score of Westell Technologies Inc was 2.27. The lowest was -5.46. And the median was -2.80.


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 Westell Technologies 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 * 1.8218+0.528 * 1.0744+0.404 * 0.6663+0.892 * 0.7885+0.115 * 1.1403
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2924+4.679 * -0.4011-0.327 * 1.8381
=-4.19

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $17.13 Mil.
Revenue was 25.514 + 21.57 + 18.613 + 14.043 = $79.74 Mil.
Gross Profit was 10.231 + 8.429 + 4.666 + 4.395 = $27.72 Mil.
Total Current Assets was $69.18 Mil.
Total Assets was $96.90 Mil.
Property, Plant and Equipment(Net PPE) was $4.47 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.16 Mil.
Selling, General & Admin. Expense(SGA) was $27.18 Mil.
Total Current Liabilities was $17.19 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -2.473 + -3.866 + -13.895 + -27.54 = $-47.77 Mil.
Non Operating Income was -0.061 + 0.038 + -0.018 + -0.029 = $-0.07 Mil.
Cash Flow from Operations was 0.84 + -0.609 + -4.556 + -4.517 = $-8.84 Mil.
Accounts Receivable was $11.93 Mil.
Revenue was 23.646 + 27.825 + 24.421 + 25.236 = $101.13 Mil.
Gross Profit was 8.065 + 9.684 + 8.09 + 11.932 = $37.77 Mil.
Total Current Assets was $86.47 Mil.
Total Assets was $139.18 Mil.
Property, Plant and Equipment(Net PPE) was $2.60 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.12 Mil.
Selling, General & Admin. Expense(SGA) was $26.67 Mil.
Total Current Liabilities was $13.43 Mil.
Long-Term Debt was $0.00 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)
=(17.13 / 79.74) / (11.925 / 101.128)
=0.21482318 / 0.11791986
=1.8218

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)
=(8.429 / 101.128) / (10.231 / 79.74)
=0.37349695 / 0.34764234
=1.0744

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 - (69.18 + 4.468) / 96.898) / (1 - (86.467 + 2.597) / 139.183)
=0.23994303 / 0.36009426
=0.6663

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
=79.74 / 101.128
=0.7885

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))
=(6.118 / (6.118 + 2.597)) / (7.156 / (7.156 + 4.468))
=0.70200803 / 0.61562285
=1.1403

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)
=(27.177 / 79.74) / (26.668 / 101.128)
=0.34082017 / 0.2637054
=1.2924

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 + 17.185) / 96.898) / ((0 + 13.429) / 139.183)
=0.17735144 / 0.09648448
=1.8381

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
=(-47.774 - -0.07 - -8.842) / 96.898
=-0.4011

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.

Westell Technologies Inc has a M-score of -4.19 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.

Westell Technologies Inc Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.9530.93930.93641.19740.86981.68350.79791.3170.89980.9078
GMI 0.99160.91721.111.08130.86591.1310.7141.21070.82011.2438
AQI 0.8990.92910.36680.98040.8492.92250.57750.222910.21640.6547
SGI 1.04780.91850.80130.89210.97620.81470.29510.88952.63020.8242
DEPI 0.91031.01520.83081.0331.02080.98830.71841.12620.83380.9996
SGAI 0.99821.25851.24511.03760.76690.72122.23861.40920.64571.2024
LVGI 0.78161.08341.26841.15390.81240.82360.19191.73082.19041.1505
TATA -0.1035-0.1637-0.511-0.0221-0.05910.21690.2361-0.22530.0175-0.4943
M-score -2.95-3.52-5.45-2.52-2.93-0.05-2.49-3.842.24-5.13

Westell Technologies Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 2.24831.11910.89980.63360.39710.56680.90781.1791.82181.8532
GMI 0.86460.84350.86620.94211.02491.22551.24381.18351.07440.9231
AQI 0.80440.751510.21642.02932.04581.48130.65470.62320.66630.9452
SGI 1.5992.2372.63022.07231.40551.01830.82420.72480.78850.9553
DEPI 0.99020.93930.83380.9941.07581.09820.99961.05611.14031.1309
SGAI 0.91190.68960.61850.69090.87291.03161.20241.35941.29241.1537
LVGI 3.19891.98992.19041.17180.80080.96981.15051.60781.83811.9848
TATA -0.2046-0.22960.01750.0129-0.1313-0.353-0.5032-0.5393-0.4011-0.2193
M-score -2.61-2.802.27-1.42-2.76-4.18-5.17-5.39-4.19-3.16
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