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Westell Technologies Inc (NAS:WSTL)
Beneish M-Score
-5.07 (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 -5.07 suggests that the company is not a manipulator.

WSTL' s 10-Year Beneish M-Score Range
Min: -5.46   Max: 2.32
Current: -5.07

-5.46
2.32

During the past 13 years, the highest Beneish M-Score of Westell Technologies Inc was 2.32. The lowest was -5.46. And the median was -2.93.


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 * 0.9078+0.528 * 1.2438+0.404 * 0.6585+0.892 * 0.8242+0.115 * 0.9996
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2024+4.679 * -0.4857-0.327 * 1.1053
=-5.07

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $11.85 Mil.
Revenue was 18.613 + 14.043 + 23.646 + 27.825 = $84.13 Mil.
Gross Profit was 4.666 + 4.395 + 8.065 + 9.684 = $26.81 Mil.
Total Current Assets was $70.50 Mil.
Total Assets was $100.31 Mil.
Property, Plant and Equipment(Net PPE) was $3.60 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.42 Mil.
Selling, General & Admin. Expense(SGA) was $27.09 Mil.
Total Current Liabilities was $12.90 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -13 + -27.54 + -14.649 + -2.818 = $-58.01 Mil.
Non Operating Income was -0.018 + -0.029 + -0.016 + 0.061 = $-0.00 Mil.
Cash Flow from Operations was -4.556 + -4.517 + 2.305 + -2.519 = $-9.29 Mil.
Accounts Receivable was $15.83 Mil.
Revenue was 24.421 + 25.236 + 29.96 + 22.456 = $102.07 Mil.
Gross Profit was 8.09 + 11.932 + 12.022 + 8.417 = $40.46 Mil.
Total Current Assets was $94.38 Mil.
Total Assets was $160.87 Mil.
Property, Plant and Equipment(Net PPE) was $2.68 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.51 Mil.
Selling, General & Admin. Expense(SGA) was $27.33 Mil.
Total Current Liabilities was $18.72 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)
=(11.845 / 84.127) / (15.831 / 102.073)
=0.14079903 / 0.15509488
=0.9078

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)
=(4.395 / 102.073) / (4.666 / 84.127)
=0.39639278 / 0.31868485
=1.2438

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 - (70.504 + 3.603) / 100.307) / (1 - (94.379 + 2.681) / 160.874)
=0.26119812 / 0.39667069
=0.6585

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
=84.127 / 102.073
=0.8242

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))
=(5.511 / (5.511 + 2.681)) / (7.416 / (7.416 + 3.603))
=0.67272949 / 0.67301933
=0.9996

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)
=(27.085 / 84.127) / (27.331 / 102.073)
=0.32195371 / 0.26775935
=1.2024

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 + 12.902) / 100.307) / ((0 + 18.721) / 160.874)
=0.12862512 / 0.11637058
=1.1053

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
=(-58.007 - -0.002 - -9.287) / 100.307
=-0.4857

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 -5.07 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 0.9530.93930.93641.19740.86981.68350.49982.10260.89980.9078
GMI 0.99160.91721.111.08130.86591.1310.84170.97240.86621.2438
AQI 0.8990.92910.36680.98040.8492.92250.57750.222910.16560.6585
SGI 1.04780.91850.80130.89210.97620.81470.47110.55712.63020.8242
DEPI 0.91031.01520.83081.0331.02080.98830.71841.12620.83380.9996
SGAI 0.99821.25851.24511.03760.76690.72121.54112.13710.61851.2024
LVGI 0.78161.08341.26841.15390.81240.82360.32811.01232.05171.1053
TATA -0.1035-0.1637-0.511-0.0221-0.05910.21690.0757-0.22530.021-0.4857
M-score -2.95-3.52-5.45-2.52-2.93-0.05-3.22-3.432.32-5.07

Westell Technologies Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 2.22992.10262.29212.24831.11910.89980.63360.39710.56680.9078
GMI 0.85450.97240.86410.86460.84350.86620.94211.02491.22551.2438
AQI 1.53280.22290.95120.80440.751510.16562.02932.04581.48130.6585
SGI 0.4080.55710.92791.5992.2372.63022.07231.40551.01830.8242
DEPI 1.21421.12620.88980.76520.68430.83380.9941.07581.09820.9996
SGAI 2.39852.13711.41910.91190.68960.61850.69090.87291.03161.2024
LVGI 0.98021.73082.56993.19891.98992.05171.17180.80080.96981.1053
TATA 0.0087-0.2253-0.2258-0.2046-0.22960.0210.0164-0.121-0.3396-0.4857
M-score -1.91-3.66-3.10-2.64-2.832.32-1.40-2.71-4.12-5.07
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