Switch to:
Westell Technologies, Inc. (NAS:WSTL)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

WSTL' s 10-Year Beneish M-Score Range
Min: -5.46   Max: 0.74
Current: -2.84

-5.46
0.74

During the past 13 years, the highest Beneish M-Score of Westell Technologies, Inc. was 0.74. The lowest was -5.46. And the median was -2.73.


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 * 1.1037+0.528 * 0.8094+0.404 * 0.7515+0.892 * 2.2683+0.115 * 0.6844
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.725+4.679 * -0.2296-0.327 * 1.9899
=-2.84

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $12.36 Mil.
Revenue was 25.236 + 29.96 + 22.456 + 11.899 = $89.55 Mil.
Gross Profit was 12.235 + 12.423 + 8.776 + 5.012 = $38.45 Mil.
Total Current Assets was $122.74 Mil.
Total Assets was $149.92 Mil.
Property, Plant and Equipment(Net PPE) was $1.27 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.39 Mil.
Selling, General & Admin. Expense(SGA) was $25.96 Mil.
Total Current Liabilities was $14.03 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 1.925 + 1.328 + -2.764 + -38.158 = $-37.67 Mil.
Non Operating Income was -0.031 + 0.098 + -0.13 + 0.041 = $-0.02 Mil.
Cash Flow from Operations was 5.018 + -1.219 + -3.108 + -3.92 = $-3.23 Mil.
Accounts Receivable was $4.94 Mil.
Revenue was 8.873 + 9.854 + 9.418 + 11.334 = $39.48 Mil.
Gross Profit was 3.09 + 3.449 + 2.773 + 4.407 = $13.72 Mil.
Total Current Assets was $140.79 Mil.
Total Assets was $184.32 Mil.
Property, Plant and Equipment(Net PPE) was $1.14 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.30 Mil.
Selling, General & Admin. Expense(SGA) was $15.78 Mil.
Total Current Liabilities was $8.67 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)
=(12.357 / 89.551) / (4.936 / 39.479)
=0.13798841 / 0.1250285
=1.1037

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)
=(12.423 / 39.479) / (12.235 / 89.551)
=0.3475012 / 0.42931961
=0.8094

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 - (122.744 + 1.267) / 149.918) / (1 - (140.789 + 1.143) / 184.319)
=0.1728078 / 0.22996544
=0.7515

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
=89.551 / 39.479
=2.2683

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))
=(1.295 / (1.295 + 1.143)) / (4.392 / (4.392 + 1.267))
=0.53117309 / 0.77610885
=0.6844

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)
=(25.956 / 89.551) / (15.783 / 39.479)
=0.28984601 / 0.39978216
=0.725

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 + 14.029) / 149.918) / ((0 + 8.668) / 184.319)
=0.09357782 / 0.04702716
=1.9899

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
=(-37.669 - -0.022 - -3.229) / 149.918
=-0.2296

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 -2.84 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

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
DSRI 0.93711.10530.9530.93930.93641.19740.86981.68350.49982.0377
GMI 0.89751.12590.99160.91721.111.08130.86591.1310.84170.9334
AQI 1.10681.02470.8990.92910.36680.98040.8492.92250.57750.3263
SGI 1.12251.14651.04780.91850.80130.89210.97620.81470.47110.5749
DEPI 1.13980.95360.91031.01520.83081.0331.02080.98830.71841.1262
SGAI 1.0030.91460.99821.25851.24511.03760.76690.72121.54112.1386
LVGI 0.47460.76750.78161.08341.26841.15390.81240.82360.32810.9932
TATA 0.05060.0889-0.1035-0.1637-0.511-0.0221-0.05910.21690.0757-0.221
M-score -2.02-1.67-2.95-3.52-5.45-2.52-2.93-0.05-3.22-3.43

Westell Technologies, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.03790.43360.57030.85070.88792.22992.03772.23882.21031.1037
GMI 1.21691.12330.91970.93550.86150.85450.93340.82560.82660.8094
AQI 2.51191.88080.57750.90990.96061.53280.32630.95120.80440.7515
SGI 0.69570.57570.41290.37090.3740.4080.57490.95011.62652.2683
DEPI 1.0210.70310.71840.71730.77311.21421.12620.88980.76520.6844
SGAI 0.79360.98441.32151.75242.24962.39852.13861.45220.95040.725
LVGI 0.43320.18940.19190.2630.43090.98021.69812.56993.19891.9899
TATA 0.20650.33840.07570.1010.10310.0087-0.221-0.2258-0.2046-0.2296
M-score -0.80-1.14-3.08-2.70-2.80-1.91-3.66-3.16-2.67-2.84
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide