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GuruFocus has detected 6 Warning Signs with Parexel International Corp $PRXL.
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Parexel International Corp (NAS:PRXL)
Beneish M-Score
-2.96 (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.

Parexel International Corp has a M-score of -2.96 suggests that the company is not a manipulator.

PRXL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Max: -0.7
Current: -2.96

-3.17
-0.7

During the past 13 years, the highest Beneish M-Score of Parexel International Corp was -0.70. The lowest was -3.17. And the median was -2.57.


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 Parexel International Corp 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 * 1.0208+0.528 * 0.9849+0.404 * 1.1863+0.892 * 1.0056+0.115 * 0.9097
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0321+4.679 * -0.1128-0.327 * 1.077
=-2.96

* 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 $573 Mil.
Revenue was 605.2 + 612.2 + 576.5 + 625.5 = $2,419 Mil.
Gross Profit was 179.7 + 183.5 + 169 + 189.8 = $722 Mil.
Total Current Assets was $1,218 Mil.
Total Assets was $2,219 Mil.
Property, Plant and Equipment(Net PPE) was $247 Mil.
Depreciation, Depletion and Amortization(DDA) was $104 Mil.
Selling, General & Admin. Expense(SGA) was $385 Mil.
Total Current Liabilities was $822 Mil.
Long-Term Debt was $677 Mil.
Net Income was 17.8 + 21.8 + 37.8 + 42.7 = $120 Mil.
Non Operating Income was -2.2 + -17.7 + -0.8 + -1.6 = $-22 Mil.
Cash Flow from Operations was 150 + 46.1 + 65.4 + 131.2 = $393 Mil.
Accounts Receivable was $558 Mil.
Revenue was 611.4 + 604.2 + 585.2 + 605.125 = $2,406 Mil.
Gross Profit was 189.3 + 186 + 168.9 + 162.924 = $707 Mil.
Total Current Assets was $1,238 Mil.
Total Assets was $2,093 Mil.
Property, Plant and Equipment(Net PPE) was $257 Mil.
Depreciation, Depletion and Amortization(DDA) was $94 Mil.
Selling, General & Admin. Expense(SGA) was $370 Mil.
Total Current Liabilities was $758 Mil.
Long-Term Debt was $555 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)
=(573.1 / 2419.4) / (558.3 / 2405.925)
=0.23687691 / 0.23205212
=1.0208

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)
=(707.124 / 2405.925) / (722 / 2419.4)
=0.29390941 / 0.2984211
=0.9849

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 - (1218.4 + 247.4) / 2218.5) / (1 - (1237.5 + 256.6) / 2092.6)
=0.3392833 / 0.28600784
=1.1863

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
=2419.4 / 2405.925
=1.0056

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))
=(94.363 / (94.363 + 256.6)) / (103.8 / (103.8 + 247.4))
=0.2688688 / 0.29555809
=0.9097

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)
=(384.5 / 2419.4) / (370.457 / 2405.925)
=0.1589237 / 0.15397695
=1.0321

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)
=((677.1 + 821.7) / 2218.5) / ((554.6 + 758.1) / 2092.6)
=0.67559162 / 0.62730574
=1.077

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
=(120.1 - -22.3 - 392.7) / 2218.5
=-0.1128

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.

Parexel International Corp has a M-score of -2.96 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.

Parexel International Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.98891.15570.94350.92870.65481.70890.88090.62070.90111.0554
GMI 0.98970.96360.95570.94381.06531.14190.99410.90621.01040.953
AQI 1.36611.27061.37070.93010.95270.87451.04390.96991.15640.9713
SGI 1.20811.26671.07221.07141.06481.13771.23341.13551.02821.0412
DEPI 1.0351.11740.90990.97480.99031.0160.98160.95460.98980.9573
SGAI 0.95861.00311.09051.00980.95210.85440.98111.04920.94031.0078
LVGI 1.04270.93921.24180.97190.9161.01771.18690.97690.93821.0889
TATA -0.04830.0511-0.0559-0.08730.0429-0.1102-0.0518-0.0848-0.0093-0.0522
M-score -2.39-1.74-2.71-2.94-2.49-2.18-2.67-3.17-2.49-2.71

Parexel International Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.81920.89710.90110.58680.7340.75961.05541.17211.28081.0208
GMI 0.92420.94791.01041.04241.04731.01790.9530.93920.95360.9849
AQI 1.04041.00361.15641.18581.09951.11820.97130.93461.09181.1863
SGI 1.07341.04631.02821.01331.02561.04141.04121.03241.02311.0056
DEPI 0.93110.93740.98981.01641.02711.04290.95730.96060.94440.9097
SGAI 1.03521.01590.94030.91010.88840.91471.00781.02041.02881.0321
LVGI 0.9961.0390.93821.0771.09981.06961.08890.92011.07871.077
TATA -0.0722-0.0279-0.0093-0.0352-0.0064-0.0211-0.0522-0.049-0.0519-0.1128
M-score -2.96-2.71-2.49-2.92-2.68-2.71-2.71-2.56-2.47-2.96
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