Market Cap : 85.78 M | Enterprise Value : 82.42 M | PE Ratio : | PB Ratio : 3.09 |
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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.
Warning Sign:
Beneish M-Score -0.39 higher than -1.78, which implies that the company might have manipulated its financial results.
During the past 13 years, the highest Beneish M-Score of Digital Ally was 3.81. The lowest was -8.67. And the median was -3.45.
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.
* The bar in red indicates where Digital Ally'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 Digital Ally 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 * 1.5808 | + | 0.528 * 0.8014 | + | 0.404 * 0.7023 | + | 0.892 * 1.0071 | + | 0.115 * 3.6693 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 0.7402 | + | 4.679 * 0.254 | - | 0.327 * 0.2841 | |||||||
= | -0.39 |
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.
This Year (Dec20) TTM: | Last Year (Dec19) TTM: |
Accounts Receivable was $1.71 Mil. Revenue was 2.768 + 3.589 + 1.732 + 2.426 = $10.52 Mil. Gross Profit was 1.182 + 1.223 + 0.393 + 1.265 = $4.06 Mil. Total Current Assets was $17.83 Mil. Total Assets was $20.80 Mil. Property, Plant and Equipment(Net PPE) was $1.42 Mil. Depreciation, Depletion and Amortization(DDA) was $0.25 Mil. Selling, General, & Admin. Expense(SGA) was $9.88 Mil. Total Current Liabilities was $3.72 Mil. Long-Term Debt & Capital Lease Obligation was $0.87 Mil. Net Income was -0.321 + 0.527 + -0.498 + -2.334 = $-2.63 Mil. Non Operating Income was 1.417 + 2.365 + 1.69 + -0.105 = $5.37 Mil. Cash Flow from Operations was -3.159 + -6.059 + -2.013 + -2.044 = $-13.28 Mil. |
Accounts Receivable was $1.07 Mil. Revenue was 2.42 + 2.923 + 2.547 + 2.551 = $10.44 Mil. Gross Profit was -0.088 + 1.188 + 0.951 + 1.182 = $3.23 Mil. Total Current Assets was $7.65 Mil. Total Assets was $8.92 Mil. Property, Plant and Equipment(Net PPE) was $0.32 Mil. Depreciation, Depletion and Amortization(DDA) was $0.39 Mil. Selling, General, & Admin. Expense(SGA) was $13.26 Mil. Total Current Liabilities was $6.89 Mil. Long-Term Debt & Capital Lease Obligation was $0.04 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) |
= | (1.705 / 10.515) | / | (1.071 / 10.441) | |
= | 0.16214931 | / | 0.10257638 | |
= | 1.5808 |
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) | |
= | (3.233 / 10.441) | / | (4.063 / 10.515) | |
= | 0.30964467 | / | 0.38640038 | |
= | 0.8014 |
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 - (17.83 + 1.42) / 20.798) | / | (1 - (7.652 + 0.32) / 8.917) | |
= | 0.07443023 | / | 0.10597735 | |
= | 0.7023 |
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 | |
= | 10.515 | / | 10.441 | |
= | 1.0071 |
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)) |
= | (0.39 / (0.39 + 0.32)) | / | (0.25 / (0.25 + 1.42)) | |
= | 0.54929577 | / | 0.1497006 | |
= | 3.6693 |
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) |
= | (9.884 / 10.515) | / | (13.26 / 10.441) | |
= | 0.93999049 | / | 1.2699933 | |
= | 0.7402 |
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) |
= | ((0.872 + 3.721) / 20.798) | / | ((0.044 + 6.887) / 8.917) | |
= | 0.22083854 | / | 0.77727935 | |
= | 0.2841 |
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 | |
= | (-2.626 - 5.367 | - | -13.275) | / | 20.798 | |
= | 0.254 |
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.
Digital Ally has a M-score of -0.39 signals that the company is likely to be a manipulator.
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