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GuruFocus has detected 7 Warning Signs with Daktronics Inc $DAKT.
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Daktronics Inc (NAS:DAKT)
Beneish M-Score
-2.95 (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.

Daktronics Inc has a M-score of -2.95 suggests that the company is not a manipulator.

DAKT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.46   Max: -1.56
Current: -2.95

-3.46
-1.56

During the past 13 years, the highest Beneish M-Score of Daktronics Inc was -1.56. The lowest was -3.46. And the median was -2.46.


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 Daktronics 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 * 0.9883+0.528 * 0.8866+0.404 * 0.966+0.892 * 1.0287+0.115 * 0.8642
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0177+4.679 * -0.0807-0.327 * 1.0581
=-2.95

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $78.8 Mil.
Revenue was 143.682 + 115.719 + 169.992 + 157.146 = $586.5 Mil.
Gross Profit was 33.724 + 23.316 + 44.308 + 39.067 = $140.4 Mil.
Total Current Assets was $257.7 Mil.
Total Assets was $355.4 Mil.
Property, Plant and Equipment(Net PPE) was $66.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.6 Mil.
Selling, General & Admin. Expense(SGA) was $95.9 Mil.
Total Current Liabilities was $130.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 0.909 + -5.127 + 9.021 + 5.539 = $10.3 Mil.
Non Operating Income was -0.104 + -0.305 + 0.149 + -0.094 = $-0.4 Mil.
Cash Flow from Operations was -5.99 + 30.373 + 8.408 + 6.598 = $39.4 Mil.
Accounts Receivable was $77.6 Mil.
Revenue was 138.463 + 123.816 + 157.668 + 150.221 = $570.2 Mil.
Gross Profit was 27.976 + 22.029 + 35.513 + 35.501 = $121.0 Mil.
Total Current Assets was $245.2 Mil.
Total Assets was $349.9 Mil.
Property, Plant and Equipment(Net PPE) was $73.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $91.6 Mil.
Total Current Liabilities was $121.5 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)
=(78.846 / 586.539) / (77.554 / 570.168)
=0.13442584 / 0.13601956
=0.9883

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)
=(121.019 / 570.168) / (140.415 / 586.539)
=0.21225148 / 0.23939585
=0.8866

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 - (257.725 + 66.749) / 355.433) / (1 - (245.231 + 73.163) / 349.948)
=0.08710221 / 0.09016768
=0.966

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
=586.539 / 570.168
=1.0287

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))
=(16.943 / (16.943 + 73.163)) / (18.562 / (18.562 + 66.749))
=0.18803409 / 0.21758038
=0.8642

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)
=(95.913 / 586.539) / (91.613 / 570.168)
=0.16352365 / 0.1606772
=1.0177

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 + 130.595) / 355.433) / ((0 + 121.517) / 349.948)
=0.36742508 / 0.34724302
=1.0581

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
=(10.342 - -0.354 - 39.389) / 355.433
=-0.0807

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.

Daktronics Inc has a M-score of -2.95 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 local exchange's currency.

Daktronics Inc Annual Data

Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16Apr17
DSRI 0.91780.63071.08441.22160.97740.89231.22530.87831.03620.9883
GMI 0.98851.10591.11060.95281.08920.89711.00621.09371.10590.8866
AQI 0.88920.82570.81690.85870.95560.94020.90860.86972.06560.966
SGI 1.15351.16410.6761.12331.10831.05881.06491.11590.92571.0287
DEPI 0.77580.82920.99480.98351.07621.0091.11171.05660.91490.8642
SGAI 1.03790.88431.28990.8180.98440.95050.95790.97141.11651.0177
LVGI 0.89870.87470.90061.21161.0331.03921.16370.89570.92781.0581
TATA -0.1177-0.0598-0.157-0.0853-0.0362-0.0849-0.0382-0.0847-0.0326-0.0807
M-score -3.02-2.93-3.46-2.69-2.54-3.01-2.46-2.84-2.19-2.95

Daktronics Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 1.07620.87830.92520.96650.94231.03621.08450.98530.98980.9883
GMI 1.04571.09371.13181.10671.10741.10591.0560.99350.93890.8866
AQI 0.84880.86970.99660.93010.96412.06561.8581.83021.96070.966
SGI 1.09971.11591.03390.98770.99280.92570.96261.00910.98561.0287
DEPI 1.09411.05661.01360.96680.9510.91490.85730.85620.85330.8642
SGAI 0.9740.97141.01621.03971.03321.11651.09941.06091.09361.0177
LVGI 1.0180.89570.95120.88140.95190.92781.03611.1341.04061.0581
TATA -0.0145-0.0847-0.00620.011-0.0543-0.0326-0.0727-0.0797-0.1443-0.0807
M-score -2.42-2.84-2.46-2.41-2.75-2.19-2.44-2.60-2.87-2.95
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