Market Cap : 435.59 M | Enterprise Value : 413.58 M | P/E (TTM) : | P/B : 12.58 |
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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 -0.63 higher than -1.78, which implies that the company might have manipulated its financial results.
During the past 4 years, the highest Beneish M-Score of Rekor Systems was 0.26. The lowest was -3.53. And the median was -1.41.
* 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 Rekor Systems'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 Rekor Systems 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 * 0.0824 | + | 0.528 * 1.1547 | + | 0.404 * 0.621 | + | 0.892 * 2.4878 | + | 0.115 * 0.4476 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 0.6823 | + | 4.679 * 0.2511 | - | 0.327 * 0.1662 | |||||||
= | -0.63 |
* 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 $0.97 Mil. Revenue was 2.126 + 2.677 + 1.595 + 15.358 = $21.76 Mil. Gross Profit was 1.142 + 1.401 + 1.101 + 7.452 = $11.10 Mil. Total Current Assets was $26.90 Mil. Total Assets was $43.02 Mil. Property, Plant and Equipment(Net PPE) was $0.83 Mil. Depreciation, Depletion and Amortization(DDA) was $2.30 Mil. Selling, General, & Admin. Expense(SGA) was $19.28 Mil. Total Current Liabilities was $5.78 Mil. Long-Term Debt & Capital Lease Obligation was $1.54 Mil. Net Income was -6.669 + -0.618 + -4.109 + -2.984 = $-14.38 Mil. Non Operating Income was -3.075 + 3.453 + 0 + -1.737 = $-1.36 Mil. Cash Flow from Operations was -1.623 + -8.129 + -1.992 + -12.077 = $-23.82 Mil. |
Accounts Receivable was $4.71 Mil. Revenue was 1.536 + 1.416 + 1.01 + 4.783 = $8.75 Mil. Gross Profit was 1.146 + 1.145 + 0.52 + 2.339 = $5.15 Mil. Total Current Assets was $10.72 Mil. Total Assets was $30.82 Mil. Property, Plant and Equipment(Net PPE) was $2.47 Mil. Depreciation, Depletion and Amortization(DDA) was $1.21 Mil. Selling, General, & Admin. Expense(SGA) was $11.36 Mil. Total Current Liabilities was $10.82 Mil. Long-Term Debt & Capital Lease Obligation was $20.75 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) |
= | (0.966 / 21.756) | / | (4.714 / 8.745) | |
= | 0.04440154 | / | 0.53905089 | |
= | 0.0824 |
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) | |
= | (5.15 / 8.745) | / | (11.096 / 21.756) | |
= | 0.58890795 | / | 0.51002022 | |
= | 1.1547 |
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 - (26.903 + 0.83) / 43.018) | / | (1 - (10.715 + 2.473) / 30.823) | |
= | 0.35531638 | / | 0.57213769 | |
= | 0.621 |
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 | |
= | 21.756 | / | 8.745 | |
= | 2.4878 |
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)) |
= | (1.211 / (1.211 + 2.473)) | / | (2.296 / (2.296 + 0.83)) | |
= | 0.32871878 | / | 0.73448496 | |
= | 0.4476 |
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) |
= | (19.284 / 21.756) | / | (11.36 / 8.745) | |
= | 0.88637617 | / | 1.29902802 | |
= | 0.6823 |
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) |
= | ((1.54 + 5.784) / 43.018) | / | ((20.749 + 10.822) / 30.823) | |
= | 0.17025431 | / | 1.02426759 | |
= | 0.1662 |
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 | |
= | (-14.38 - -1.359 | - | -23.821) | / | 43.018 | |
= | 0.2511 |
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.
Rekor Systems has a M-score of -0.63 signals that the company is likely to be a manipulator.
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