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Westell Technologies Inc (NAS:WSTL)
Beneish M-Score
-2.97 (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 -2.97 suggests that the company is not a manipulator.

WSTL' s Beneish M-Score Range Over the Past 10 Years
Min: -8.61   Max: 2.24
Current: -2.97

-8.61
2.24

During the past 13 years, the highest Beneish M-Score of Westell Technologies Inc was 2.24. The lowest was -8.61. 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 * 1.3174+0.528 * 0.8144+0.404 * 0.9066+0.892 * 1.0485+0.115 * 1.0501
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9034+4.679 * -0.1252-0.327 * 1.3872
=-2.97

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $16.36 Mil.
Revenue was 20.904 + 20.215 + 25.514 + 21.57 = $88.20 Mil.
Gross Profit was 7.893 + 7.963 + 10.231 + 8.429 = $34.52 Mil.
Total Current Assets was $61.48 Mil.
Total Assets was $86.03 Mil.
Property, Plant and Equipment(Net PPE) was $3.98 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.10 Mil.
Selling, General & Admin. Expense(SGA) was $25.65 Mil.
Total Current Liabilities was $17.24 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -5.076 + -4.797 + -2.473 + -3.866 = $-16.21 Mil.
Non Operating Income was 0.107 + 0.085 + -0.061 + 0.038 = $0.17 Mil.
Cash Flow from Operations was -4.851 + -0.987 + 0.84 + -0.609 = $-5.61 Mil.
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 $69.53 Mil.
Total Assets was $99.33 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 $14.35 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)
=(16.361 / 88.203) / (11.845 / 84.127)
=0.18549256 / 0.14079903
=1.3174

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)
=(26.81 / 84.127) / (34.516 / 88.203)
=0.31868485 / 0.39132456
=0.8144

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 - (61.483 + 3.977) / 86.031) / (1 - (69.531 + 3.603) / 99.334)
=0.23911148 / 0.26375662
=0.9066

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
=88.203 / 84.127
=1.0485

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))
=(7.416 / (7.416 + 3.603)) / (7.098 / (7.098 + 3.977))
=0.67301933 / 0.64090293
=1.0501

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)
=(25.653 / 88.203) / (27.085 / 84.127)
=0.29084045 / 0.32195371
=0.9034

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 + 17.237) / 86.031) / ((0 + 14.347) / 99.334)
=0.20035801 / 0.14443192
=1.3872

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
=(-16.212 - 0.169 - -5.607) / 86.031
=-0.1252

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 -2.97 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

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.93930.93641.3810.75421.30880.64282.03770.92850.90781.3174
GMI 0.91721.110.93940.99670.97050.98090.93340.87021.28990.8144
AQI 0.92910.36680.98040.8492.92250.57750.222910.21640.66160.9066
SGI 0.91850.80130.77351.12581.04790.36630.57492.5490.82421.0485
DEPI 1.01520.83081.0331.02080.98830.71841.12620.83291.00071.0501
SGAI 1.25851.24511.19670.6650.94081.18132.13860.64881.14540.9034
LVGI 1.08341.26841.15390.81240.82360.19191.73082.19041.16261.3872
TATA -0.1637-0.5829-0.0229-0.05910.21710.0757-0.22530.0236-0.4904-0.1252
M-score -3.52-5.79-2.56-2.81-0.31-3.00-3.732.25-5.08-2.97

Westell Technologies Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.38130.89980.63360.39710.56680.90781.1791.82181.85321.3174
GMI 1.40480.82010.90680.99851.20161.24381.18351.07440.92310.8144
AQI 0.751510.21642.02932.04581.48130.66160.62320.66630.94520.9066
SGI 6.56472.63022.07231.40551.01830.82420.72480.78850.95531.0485
DEPI 0.68430.83380.9941.07581.09820.99961.05611.14031.13091.0501
SGAI 0.24810.64570.71770.90241.06261.20241.35941.29241.15370.9034
LVGI 1.98992.19041.17180.80080.96981.16261.60781.83811.98481.3872
TATA -0.22960.01750.0129-0.1313-0.353-0.4995-0.5303-0.3918-0.2094-0.1252
M-score 0.722.24-1.44-2.77-4.20-5.15-5.35-4.15-3.11-2.97
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