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Westell Technologies Inc (NAS:WSTL)
Beneish M-Score
-5.27 (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 -5.27 suggests that the company is not a manipulator.

WSTL' s 10-Year Beneish M-Score Range
Min: -5.46   Max: 2.32
Current: -5.27

-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 -2.73.


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 * 1.179+0.528 * 1.1835+0.404 * 0.6237+0.892 * 0.7248+0.115 * 1.0561
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3594+4.679 * -0.5216-0.327 * 1.4695
=-5.27

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $14.45 Mil.
Revenue was 21.57 + 18.613 + 14.043 + 23.646 = $77.87 Mil.
Gross Profit was 8.429 + 4.666 + 4.395 + 8.065 = $25.56 Mil.
Total Current Assets was $70.54 Mil.
Total Assets was $99.02 Mil.
Property, Plant and Equipment(Net PPE) was $3.76 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.31 Mil.
Selling, General & Admin. Expense(SGA) was $26.78 Mil.
Total Current Liabilities was $15.23 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -3.866 + -13 + -27.54 + -14.649 = $-59.06 Mil.
Non Operating Income was 0.038 + -0.018 + -0.029 + -0.016 = $-0.03 Mil.
Cash Flow from Operations was -0.609 + -4.556 + -4.517 + 2.305 = $-7.38 Mil.
Accounts Receivable was $16.91 Mil.
Revenue was 27.825 + 24.421 + 25.236 + 29.96 = $107.44 Mil.
Gross Profit was 9.684 + 8.09 + 11.932 + 12.022 = $41.73 Mil.
Total Current Assets was $90.96 Mil.
Total Assets was $155.70 Mil.
Property, Plant and Equipment(Net PPE) was $2.41 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.54 Mil.
Selling, General & Admin. Expense(SGA) was $27.18 Mil.
Total Current Liabilities was $16.30 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)
=(14.452 / 77.872) / (16.913 / 107.442)
=0.1855866 / 0.15741516
=1.179

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)
=(4.666 / 107.442) / (8.429 / 77.872)
=0.38837698 / 0.32816674
=1.1835

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 - (70.536 + 3.76) / 99.023) / (1 - (90.956 + 2.406) / 155.701)
=0.24970966 / 0.40037636
=0.6237

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
=77.872 / 107.442
=0.7248

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))
=(5.542 / (5.542 + 2.406)) / (7.306 / (7.306 + 3.76))
=0.69728234 / 0.6602205
=1.0561

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)
=(26.775 / 77.872) / (27.175 / 107.442)
=0.34383347 / 0.25292716
=1.3594

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 + 15.234) / 99.023) / ((0 + 16.3) / 155.701)
=0.15384305 / 0.10468783
=1.4695

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
=(-59.055 - -0.025 - -7.377) / 99.023
=-0.5216

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 -5.27 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 2.10262.29212.24831.11910.89980.63360.39710.56680.90781.179
GMI 0.97240.86410.86460.84350.86620.94211.02491.22551.24381.1835
AQI 0.22290.95120.80440.751510.16562.02932.04581.48130.65850.6237
SGI 0.55710.92791.5992.2372.63022.07231.40551.01830.82420.7248
DEPI 1.12620.88980.76520.68430.83380.9941.07581.09820.99961.0561
SGAI 2.13711.41910.91190.68960.61850.69090.87291.03161.20241.3594
LVGI 1.73082.56993.19891.98992.05171.17180.80080.96981.10531.4695
TATA -0.2253-0.2258-0.2046-0.22960.0210.0164-0.121-0.3396-0.4857-0.5216
M-score -3.66-3.10-2.64-2.832.32-1.40-2.71-4.12-5.07-5.27
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