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Westell Technologies Inc (NAS:WSTL)
Beneish M-Score
-1.41 (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 -1.41 signals that the company is a manipulator.

WSTL' s 10-Year Beneish M-Score Range
Min: -5.45   Max: 2.27
Current: -1.41

-5.45
2.27

During the past 13 years, the highest Beneish M-Score of Westell Technologies Inc was 2.27. The lowest was -5.45. 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 * 0.6336+0.528 * 0.917+0.404 * 2.0293+0.892 * 2.0723+0.115 * 0.993
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7164+4.679 * 0.0192-0.327 * 1.1718
=-1.41

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $16.9 Mil.
Revenue was 27.825 + 24.421 + 25.236 + 29.96 = $107.4 Mil.
Gross Profit was 9.684 + 8.524 + 12.235 + 12.423 = $42.9 Mil.
Total Current Assets was $91.0 Mil.
Total Assets was $155.7 Mil.
Property, Plant and Equipment(Net PPE) was $2.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.6 Mil.
Selling, General & Admin. Expense(SGA) was $28.2 Mil.
Total Current Liabilities was $16.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.818 + 4.878 + 1.925 + 1.328 = $5.3 Mil.
Non Operating Income was 0.061 + 0.007 + -0.031 + 0.098 = $0.1 Mil.
Cash Flow from Operations was -2.519 + 0.906 + 5.018 + -1.219 = $2.2 Mil.
Accounts Receivable was $12.9 Mil.
Revenue was 22.456 + 10.663 + 8.873 + 9.854 = $51.8 Mil.
Gross Profit was 8.417 + 4.013 + 3.09 + 3.449 = $19.0 Mil.
Total Current Assets was $116.0 Mil.
Total Assets was $146.0 Mil.
Property, Plant and Equipment(Net PPE) was $1.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.8 Mil.
Selling, General & Admin. Expense(SGA) was $19.0 Mil.
Total Current Liabilities was $13.0 Mil.
Long-Term Debt was $0.0 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)
=(16.913 / 107.442) / (12.881 / 51.846)
=0.15741516 / 0.24844732
=0.6336

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)
=(8.524 / 51.846) / (9.684 / 107.442)
=0.36587201 / 0.39896875
=0.917

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 - (90.956 + 2.406) / 155.701) / (1 - (115.981 + 1.247) / 146.042)
=0.40037636 / 0.19729941
=2.0293

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
=107.442 / 51.846
=2.0723

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))
=(2.816 / (2.816 + 1.247)) / (5.561 / (5.561 + 2.406))
=0.69308393 / 0.69800427
=0.993

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)
=(28.175 / 107.442) / (18.979 / 51.846)
=0.26223451 / 0.36606488
=0.7164

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 + 16.3) / 155.701) / ((0 + 13.047) / 146.042)
=0.10468783 / 0.08933731
=1.1718

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
=(5.313 - 0.135 - 2.186) / 155.701
=0.0192

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 -1.41 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.

Westell Technologies Inc Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 1.10530.9530.93930.93641.19740.86981.68350.49982.10260.901
GMI 1.12590.99160.91721.111.08130.86591.1310.84170.97240.8353
AQI 1.02470.8990.92910.36680.98040.8492.92250.57750.222910.1007
SGI 1.14651.04780.91850.80130.89210.97620.81470.47110.55712.6302
DEPI 0.95360.91031.01520.83081.0331.02080.98830.71841.12620.7583
SGAI 0.91460.99821.25851.24511.03760.76690.72121.54112.13710.6492
LVGI 0.76750.78161.08341.26841.15390.81240.82360.32811.01232.0131
TATA 0.0889-0.1035-0.1637-0.511-0.0221-0.05910.21690.0757-0.22530.0238
M-score -1.67-2.95-3.52-5.45-2.52-2.93-0.05-3.22-3.432.29

Westell Technologies Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.57030.85070.88792.22992.10262.29212.24831.11910.9010.6336
GMI 0.91970.93550.86150.85450.97240.86410.85220.82750.84250.917
AQI 0.57750.90990.96061.53280.22290.95120.80440.751510.10072.0293
SGI 0.41290.37090.3740.4080.55710.92791.5992.2372.63022.0723
DEPI 0.71840.71730.77311.21421.12620.88980.76520.68440.75830.993
SGAI 1.32151.75242.24962.39852.13711.41910.92870.70950.64110.7164
LVGI 0.19190.2630.43090.98021.73082.56993.19891.98992.01311.1718
TATA 0.07570.1010.10310.0087-0.2253-0.2258-0.2046-0.22960.02380.0192
M-score -3.08-2.70-2.80-1.91-3.66-3.10-2.65-2.842.29-1.41
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