Market Cap : 1.22 B | Enterprise Value : 1.15 B | P/E (TTM) : | P/B : 11.13 |
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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.
Good Sign:
Beneish M-Score -2.93 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
During the past 13 years, the highest Beneish M-Score of Cerus was 362.06. The lowest was -7.90. And the median was -2.39.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
* The bar in red indicates where Cerus's Beneish M-Score falls into.
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 Cerus 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 * 0.9145 | + | 0.528 * 0.9768 | + | 0.404 * 0.7296 | + | 0.892 * 1.2242 | + | 0.115 * 0.7067 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 0.8375 | + | 4.679 * -0.1105 | - | 0.327 * 0.7678 | |||||||
= | -2.93 |
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
This Year (Sep20) TTM: | Last Year (Sep19) TTM: |
Accounts Receivable was $16.2 Mil. Revenue was 29.191 + 26.827 + 24.641 + 26.488 = $107.1 Mil. Gross Profit was 18.238 + 17.122 + 16.321 + 17.195 = $68.9 Mil. Total Current Assets was $177.3 Mil. Total Assets was $213.4 Mil. Property, Plant and Equipment(Net PPE) was $27.7 Mil. Depreciation, Depletion and Amortization(DDA) was $2.9 Mil. Selling, General, & Admin. Expense(SGA) was $65.5 Mil. Total Current Liabilities was $46.2 Mil. Long-Term Debt & Capital Lease Obligation was $56.8 Mil. Net Income was -14.139 + -14.871 + -16.466 + -16.923 = $-62.4 Mil. Non Operating Income was 0.841 + 0.733 + -0.072 + 0.526 = $2.0 Mil. Cash Flow from Operations was -4.679 + -7.804 + -19.802 + -8.561 = $-40.8 Mil. |
Accounts Receivable was $14.5 Mil. Revenue was 22.846 + 22.475 + 21.965 + 20.238 = $87.5 Mil. Gross Profit was 15.263 + 14.364 + 13.533 + 11.796 = $55.0 Mil. Total Current Assets was $126.3 Mil. Total Assets was $164.4 Mil. Property, Plant and Equipment(Net PPE) was $29.3 Mil. Depreciation, Depletion and Amortization(DDA) was $2.1 Mil. Selling, General, & Admin. Expense(SGA) was $63.9 Mil. Total Current Liabilities was $45.6 Mil. Long-Term Debt & Capital Lease Obligation was $57.8 Mil. |
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Accounts Receivable 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) |
= | (16.236 / 107.147) | / | (14.502 / 87.524) | |
= | 0.15153014 | / | 0.1656917 | |
= | 0.9145 |
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) | |
= | (54.956 / 87.524) | / | (68.876 / 107.147) | |
= | 0.62789635 | / | 0.64281781 | |
= | 0.9768 |
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 - (177.299 + 27.731) / 213.354) | / | (1 - (126.317 + 29.328) / 164.438) | |
= | 0.03901497 | / | 0.05347304 | |
= | 0.7296 |
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 | |
= | 107.147 | / | 87.524 | |
= | 1.2242 |
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)) |
= | (2.117 / (2.117 + 29.328)) | / | (2.92 / (2.92 + 27.731)) | |
= | 0.0673239 | / | 0.09526606 | |
= | 0.7067 |
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) |
= | (65.488 / 107.147) | / | (63.874 / 87.524) | |
= | 0.6111977 | / | 0.7297884 | |
= | 0.8375 |
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) |
= | ((56.808 + 46.189) / 213.354) | / | ((57.829 + 45.559) / 164.438) | |
= | 0.48275167 | / | 0.62873545 | |
= | 0.7678 |
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 | |
= | (-62.399 - 2.028 | - | -40.846) | / | 213.354 | |
= | -0.1105 |
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.
Cerus has a M-score of -2.93 suggests that the company is unlikely to be a manipulator.
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