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Beneish M-Score 2.29 higher than -2.22, which implies that it might have manipulated its financial results.
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 2.29 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Westell Technologies Inc was 2.29. The lowest was -5.46. And the median was -2.72.
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 * 0.901||+||0.528 * 0.8425||+||0.404 * 10.1007||+||0.892 * 2.6302||+||0.115 * 0.7583|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6411||+||4.679 * 0.0238||-||0.327 * 2.0131|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $15.9 Mil.|
Revenue was 24.421 + 25.236 + 29.96 + 22.456 = $102.1 Mil.
Gross Profit was 8.524 + 12.235 + 12.423 + 8.417 = $41.6 Mil.
Total Current Assets was $95.6 Mil.
Total Assets was $161.0 Mil.
Property, Plant and Equipment(Net PPE) was $1.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.5 Mil.
Selling, General & Admin. Expense(SGA) was $28.3 Mil.
Total Current Liabilities was $18.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 4.878 + 1.925 + 1.328 + -2.764 = $5.4 Mil.
Non Operating Income was 0.007 + -0.031 + 0.098 + -0.13 = $-0.1 Mil.
Cash Flow from Operations was 0.906 + 5.018 + -1.219 + -3.108 = $1.6 Mil.
|Accounts Receivable was $6.7 Mil.
Revenue was 10.663 + 8.873 + 9.854 + 9.418 = $38.8 Mil.
Gross Profit was 4.013 + 3.09 + 3.449 + 2.773 = $13.3 Mil.
Total Current Assets was $135.8 Mil.
Total Assets was $142.4 Mil.
Property, Plant and Equipment(Net PPE) was $1.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.4 Mil.
Selling, General & Admin. Expense(SGA) was $16.8 Mil.
Total Current Liabilities was $8.1 Mil.
Long-Term Debt was $0.0 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)|
|=||(15.851 / 102.073)||/||(6.689 / 38.808)|
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)|
|=||(12.235 / 38.808)||/||(8.524 / 102.073)|
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 - (95.582 + 1.946) / 160.974)||/||(1 - (135.798 + 1.081) / 142.437)|
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))|
|=||(1.381 / (1.381 + 1.081))||/||(5.53 / (5.53 + 1.946))|
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)|
|=||(28.331 / 102.073)||/||(16.802 / 38.808)|
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 + 18.38) / 160.974)||/||((0 + 8.079) / 142.437)|
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|
|=||(5.367 - -0.056||-||1.597)||/||160.974|
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 2.29 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
Westell Technologies Inc Annual Data
Westell Technologies Inc Quarterly Data