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GuruFocus has detected 5 Warning Signs with Exponent Inc $EXPO.
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Exponent Inc (NAS:EXPO)
Beneish M-Score
-2.69 (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.

Exponent Inc has a M-score of -2.69 suggests that the company is not a manipulator.

EXPO' s Beneish M-Score Range Over the Past 10 Years
Min: -4.41   Max: 6.81
Current: -2.69

-4.41
6.81

During the past 13 years, the highest Beneish M-Score of Exponent Inc was 6.81. The lowest was -4.41. And the median was -2.66.


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 Exponent 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 * 0.9864+0.528 * 1.0822+0.404 * 1.0639+0.892 * 1.0011+0.115 * 1.103
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9867+4.679 * -0.0604-0.327 * 0.9946
=-2.69

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $62.7 Mil.
Revenue was 84.122 + 77.013 + 77.612 + 77.295 = $316.0 Mil.
Gross Profit was 29.704 + 30.47 + 29.815 + 26.294 = $116.3 Mil.
Total Current Assets was $263.6 Mil.
Total Assets was $398.2 Mil.
Property, Plant and Equipment(Net PPE) was $36.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.3 Mil.
Selling, General & Admin. Expense(SGA) was $27.6 Mil.
Total Current Liabilities was $57.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 16.576 + 10.388 + 11.289 + 10.453 = $48.7 Mil.
Non Operating Income was 2.542 + 1.648 + 2.146 + 1.575 = $7.9 Mil.
Cash Flow from Operations was -1.784 + 29.712 + 22.689 + 14.232 = $64.8 Mil.
Accounts Receivable was $63.5 Mil.
Revenue was 83.156 + 73.681 + 78.994 + 79.864 = $315.7 Mil.
Gross Profit was 31.139 + 28.924 + 36.141 + 29.495 = $125.7 Mil.
Total Current Assets was $261.7 Mil.
Total Assets was $377.4 Mil.
Property, Plant and Equipment(Net PPE) was $28.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.5 Mil.
Selling, General & Admin. Expense(SGA) was $27.9 Mil.
Total Current Liabilities was $54.7 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)
=(62.655 / 316.042) / (63.451 / 315.695)
=0.19824897 / 0.2009883
=0.9864

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)
=(125.699 / 315.695) / (116.283 / 316.042)
=0.39816595 / 0.36793527
=1.0822

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 - (263.617 + 36.572) / 398.162) / (1 - (261.652 + 28.465) / 377.405)
=0.24606316 / 0.23128469
=1.0639

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
=316.042 / 315.695
=1.0011

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))
=(5.501 / (5.501 + 28.465)) / (6.294 / (6.294 + 36.572))
=0.16195607 / 0.14682966
=1.103

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)
=(27.569 / 316.042) / (27.91 / 315.695)
=0.08723208 / 0.08840812
=0.9867

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 + 57.416) / 398.162) / ((0 + 54.72) / 377.405)
=0.14420261 / 0.14499013
=0.9946

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
=(48.706 - 7.911 - 64.849) / 398.162
=-0.0604

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.

Exponent Inc has a M-score of -2.69 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.

Exponent Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.01920.93231.01151.05310.92611.08760.89111.09050.99890.9798
GMI 2.61810.97621.10390.92990.93921.01820.99930.81480.96941.0622
AQI 0.91061.05461.20251.01721.11831.04111.11251.20480.9971.035
SGI 1.21751.11550.99581.09161.09521.07421.0121.02881.02671.0072
DEPI 1.13640.99840.89060.95020.98120.9520.99640.91610.9951.1272
SGAI 0.08470.99720.82541.02920.96860.96241.07232.07011.00770.9607
LVGI 1.26471.0930.82871.02151.01391.00630.92131.03610.95610.9569
TATA -0.0464-0.0725-0.0379-0.0456-0.0559-0.0478-0.0901-0.0323-0.0487-0.0644
M-score -1.58-2.80-2.44-2.61-2.71-2.53-2.93-2.74-2.69-2.71

Exponent Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.09051.00480.67471.01290.99890.70521.53061.62040.97980.9864
GMI 0.81480.84220.81640.81211.04030.99221.02551.1251.02321.0822
AQI 1.20481.08871.01630.97320.9971.13451.15021.23751.0351.0639
SGI 1.02881.03191.03921.02931.02671.02161.00260.99671.00721.0011
DEPI 0.91610.92710.92010.9860.9951.02061.0121.14211.12721.103
SGAI 2.07012.01362.01312.19910.7360.87770.88660.75381.14940.9867
LVGI 1.03610.84190.95410.93020.95610.94390.91070.95190.95690.9946
TATA -0.0323-0.0539-0.0363-0.0421-0.0487-0.0308-0.0386-0.0596-0.0644-0.0604
M-score -2.74-2.88-3.17-2.93-2.61-2.78-2.05-1.95-2.76-2.69
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