ReadSoft AB (LTS:0GQO) Beneish M-Score : -2.79 (As of Jun. 17, 2024)

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What is ReadSoft AB Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

The historical rank and industry rank for ReadSoft AB's Beneish M-Score or its related term are showing as below:

LTS:0GQO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.15 Med: -2.62 Max: -2.33
Current: -2.79

During the past 13 years, the highest Beneish M-Score of ReadSoft AB was -2.33. The lowest was -3.15. And the median was -2.62.

ReadSoft AB Beneish M-Score Historical Data

The historical data trend for ReadSoft AB's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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ReadSoft AB Beneish M-Score Chart

ReadSoft AB Annual Data

Trend

Dec04

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Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

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Dec13

Beneish M-Score

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-2.33

-3.10

ReadSoft AB Quarterly Data
	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14
Beneish M-Score	Get a 7-Day Free Trial															-2.33	-2.57	-3.10	-3.15	-2.79

Competitive Comparison of ReadSoft AB's Beneish M-Score

For the Software - Application subindustry, ReadSoft AB's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

ReadSoft AB's Beneish M-Score Distribution in the Software Industry

For the Software industry and Technology sector, ReadSoft AB's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where ReadSoft AB's Beneish M-Score falls into.

ReadSoft AB Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 ReadSoft AB for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.1733

0.528 * 0.9925

0.404 * 1.0146

0.892 * 1.0226

0.115 * 0.9861

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0494

4.679 * -0.095798

0.327 * 1.0907

-2.79

This Year (Jun14) TTM:

Last Year (Jun13) TTM:

Total Receivables was kr251.6 Mil.
Revenue was 209.3 + 176.8 + 230.084 + 177.7 = kr793.9 Mil.
Gross Profit was 206.7 + 182.2 + 234.089 + 176 = kr799.0 Mil.
Total Current Assets was kr414.9 Mil.
Total Assets was kr814.3 Mil.
Property, Plant and Equipment(Net PPE) was kr16.6 Mil.
Depreciation, Depletion and Amortization(DDA) was kr129.5 Mil.
Selling, General, & Admin. Expense(SGA) was kr-85.1 Mil.
Total Current Liabilities was kr417.1 Mil.
Long-Term Debt & Capital Lease Obligation was kr0.0 Mil.
Net Income was 4 + -11.8 + 18.717 + -4.7 = kr6.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = kr0.0 Mil.
Cash Flow from Operations was 18.4 + 54.2 + 16.725 + -5.1 = kr84.2 Mil.

Total Receivables was kr209.7 Mil.
Revenue was 190.9 + 162.6 + 243.226 + 179.6 = kr776.3 Mil.
Gross Profit was 191.5 + 167.9 + 233.734 + 182.3 = kr775.4 Mil.
Total Current Assets was kr411.7 Mil.
Total Assets was kr796.4 Mil.
Property, Plant and Equipment(Net PPE) was kr15.7 Mil.
Depreciation, Depletion and Amortization(DDA) was kr108.9 Mil.
Selling, General, & Admin. Expense(SGA) was kr-79.3 Mil.
Total Current Liabilities was kr374.0 Mil.
Long-Term Debt & Capital Lease Obligation was kr0.0 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(251.6 / 793.884)	/	(209.7 / 776.326)
	=	0.316923	/	0.270118
	=	1.1733

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)
	=	(775.434 / 776.326)	/	(798.989 / 793.884)
	=	0.998851	/	1.00643
	=	0.9925

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (414.9 + 16.6) / 814.3)	/	(1 - (411.7 + 15.7) / 796.4)
	=	0.470097	/	0.463335
	=	1.0146

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	793.884	/	776.326
	=	1.0226

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(108.919 / (108.919 + 15.7))	/	(129.463 / (129.463 + 16.6))
	=	0.874016	/	0.88635
	=	0.9861

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(-85.1 / 793.884)	/	(-79.3 / 776.326)
	=	-0.107195	/	-0.102148
	=	1.0494

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((0 + 417.1) / 814.3)	/	((0 + 374) / 796.4)
	=	0.512219	/	0.469613
	=	1.0907

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
	=	(6.217 - 0	-	84.225)	/	814.3
	=	-0.095798

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

ReadSoft AB has a M-score of -2.79 suggests that the company is unlikely to be a manipulator.

ReadSoft AB Beneish M-Score Related Terms

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ReadSoft AB (LTS:0GQO) Business Description

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ReadSoft AB is a Sweden-based company that creates and markets software and services for document automation, processes such as data entry, information verification, document workflows, and e-voicing. The company operates in over 16 countries worldwide, with partnerships in an additional 70. The company offers solutions primarily for industries such as banking, manufacturing, service bureaus, market research, insurance, government, and medical. Major customers include IKEA, Audi, Porsche, Yves Rocher, Swedish Tax, DaimlerChrysler, HSBS Bank, Avon, Bosch, London Underground, New York Transit, Toyota, Volvo, Monoprix, Ericsson, and ING. The company is headquartered in Helsingborg, Sweden. The company offers ReadSoft DOCUMENTS, a complete software platform for document automation. The product incorporates five Automation Areas: Capture, capturing the information in any format and making it ready for electronic processing; Understand, enabling the computer to read, sort, interpret, extract, and index documents electronically; Manage, providing customers with control of electronic documents, including the verification and quality control with archiving and monitoring capabilities; Integrate, integration with the business software; and Interchange, Electronic Data Interchange. Capabilities within each Automation Area are customized to the needs of the customer, and solutions can be expanded to include any required extra capabilities. Also, this software can be integrated with systems such as SAP and Oracle E-Business Suite, Intentia, and IFS. ReadSoft business solutions for specific areas include: ReadSoft Documents for Mailrooms, Documents for EDI, Documents for Invoices, and Documents for Forms. Additionally, the company offers Professional Services such as project management and customization, Solution Optimization, Training, and Technical Support.

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