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Westell Technologies Inc (NAS:WSTL)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

WSTL' s 10-Year Beneish M-Score Range
Min: -5.45   Max: 2.27
Current: -2.71

-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 * 0.3974+0.528 * 1.0064+0.404 * 2.0458+0.892 * 1.4044+0.115 * 1.0748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8959+4.679 * -0.1178-0.327 * 0.8008
=-2.71

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $11.9 Mil.
Revenue was 23.646 + 27.825 + 24.421 + 25.236 = $101.1 Mil.
Gross Profit was 8.065 + 9.684 + 8.524 + 12.235 = $38.5 Mil.
Total Current Assets was $86.5 Mil.
Total Assets was $139.2 Mil.
Property, Plant and Equipment(Net PPE) was $2.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.1 Mil.
Selling, General & Admin. Expense(SGA) was $27.3 Mil.
Total Current Liabilities was $13.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -14.649 + -2.818 + 4.878 + 1.925 = $-10.7 Mil.
Non Operating Income was -0.016 + 0.061 + 0.007 + -0.031 = $0.0 Mil.
Cash Flow from Operations was 2.305 + -2.519 + 0.906 + 5.018 = $5.7 Mil.
Accounts Receivable was $21.4 Mil.
Revenue was 29.96 + 22.456 + 10.663 + 8.928 = $72.0 Mil.
Gross Profit was 12.022 + 8.417 + 4.013 + 3.143 = $27.6 Mil.
Total Current Assets was $123.7 Mil.
Total Assets was $151.6 Mil.
Property, Plant and Equipment(Net PPE) was $1.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.9 Mil.
Selling, General & Admin. Expense(SGA) was $21.7 Mil.
Total Current Liabilities was $18.3 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)
=(11.925 / 101.128) / (21.369 / 72.007)
=0.11791986 / 0.29676281
=0.3974

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)
=(9.684 / 72.007) / (8.065 / 101.128)
=0.38322663 / 0.38078475
=1.0064

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 - (86.467 + 2.597) / 139.183) / (1 - (123.679 + 1.252) / 151.618)
=0.36009426 / 0.17601472
=2.0458

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
=101.128 / 72.007
=1.4044

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))
=(3.863 / (3.863 + 1.252)) / (6.137 / (6.137 + 2.597))
=0.75522972 / 0.70265629
=1.0748

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)
=(27.267 / 101.128) / (21.67 / 72.007)
=0.26962859 / 0.30094296
=0.8959

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 + 13.429) / 139.183) / ((0 + 18.267) / 151.618)
=0.09648448 / 0.12048042
=0.8008

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
=(-10.664 - 0.021 - 5.71) / 139.183
=-0.1178

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 -2.71 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 1.10530.9530.93930.93641.3810.75421.30880.64282.10260.901
GMI 1.12590.99160.91721.110.93940.99670.97050.98090.97240.8353
AQI 1.05450.8990.92910.36682.21720.37542.92250.57750.222910.1007
SGI 1.14651.04780.91850.80130.77351.12581.04790.36630.55712.6302
DEPI 0.95360.91031.01520.83081.0331.02080.98830.71841.12620.7583
SGAI 0.91460.99821.25851.24511.19670.6650.94081.18132.13710.6492
LVGI 0.74120.80931.08341.26840.9510.98570.82360.32811.01232.0131
TATA 0.0889-0.1035-0.1637-0.511-0.0188-0.05910.21710.0757-0.22530.0238
M-score -1.65-2.96-3.52-5.45-1.97-3.06-0.31-3.04-3.432.29

Westell Technologies Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.85681.17532.89492.67142.76222.30551.15410.92960.63510.3974
GMI 0.93630.98290.95141.03040.96340.89930.87470.8910.9261.0064
AQI 0.90990.96061.53280.22290.95120.80440.751510.10072.02932.0458
SGI 0.36820.28250.31420.43850.771.55932.16922.54912.06741.4044
DEPI 0.71730.77311.21421.12620.88980.76520.68440.75830.9931.0748
SGAI 1.4871.7681.99131.91521.43270.89940.69880.63410.69080.8959
LVGI 0.2630.43090.98021.73082.56993.19891.98992.01311.17180.8008
TATA 0.0820.10310.0087-0.2253-0.2258-0.2046-0.22960.02380.0192-0.1178
M-score -2.74-2.47-1.26-3.18-2.76-2.60-2.842.27-1.40-2.71
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