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GuruFocus has detected 4 Warning Signs with Radisys Corp $RSYS.
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Radisys Corp (NAS:RSYS)
Beneish M-Score
-2.90 (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.

Radisys Corp has a M-score of -2.90 suggests that the company is not a manipulator.

RSYS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.53   Max: 2.88
Current: -2.9

-5.53
2.88

During the past 13 years, the highest Beneish M-Score of Radisys Corp was 2.88. The lowest was -5.53. And the median was -2.73.


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 Radisys 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 * 1.2612+0.528 * 1.0354+0.404 * 0.5953+0.892 * 1.0199+0.115 * 1.0961
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1302+4.679 * -0.1009-0.327 * 1.1515
=-2.90

* 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 $49.9 Mil.
Revenue was 37.61 + 40.561 + 55.397 + 61.288 = $194.9 Mil.
Gross Profit was 8.222 + 13.613 + 14.246 + 15.445 = $51.5 Mil.
Total Current Assets was $99.8 Mil.
Total Assets was $124.6 Mil.
Property, Plant and Equipment(Net PPE) was $7.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.3 Mil.
Selling, General & Admin. Expense(SGA) was $35.5 Mil.
Total Current Liabilities was $70.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -10.008 + -4.057 + -2.638 + -0.591 = $-17.3 Mil.
Non Operating Income was -0.342 + 0.672 + 0.255 + 1.069 = $1.7 Mil.
Cash Flow from Operations was -14.511 + 7.169 + 2.017 + -1.059 = $-6.4 Mil.
Accounts Receivable was $38.8 Mil.
Revenue was 55.146 + 44.077 + 44.78 + 47.049 = $191.1 Mil.
Gross Profit was 12.784 + 13.918 + 13.007 + 12.601 = $52.3 Mil.
Total Current Assets was $96.4 Mil.
Total Assets was $133.0 Mil.
Property, Plant and Equipment(Net PPE) was $5.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.0 Mil.
Selling, General & Admin. Expense(SGA) was $30.8 Mil.
Total Current Liabilities was $65.8 Mil.
Long-Term Debt was $0.0 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)
=(49.925 / 194.856) / (38.813 / 191.052)
=0.25621485 / 0.20315412
=1.2612

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)
=(52.31 / 191.052) / (51.526 / 194.856)
=0.2737998 / 0.26443117
=1.0354

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 - (99.798 + 7.325) / 124.559) / (1 - (96.355 + 5.4) / 133.038)
=0.13998186 / 0.23514334
=0.5953

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
=194.856 / 191.052
=1.0199

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))
=(18.045 / (18.045 + 5.4)) / (17.269 / (17.269 + 7.325))
=0.7696737 / 0.70216313
=1.0961

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)
=(35.465 / 194.856) / (30.767 / 191.052)
=0.1820062 / 0.16103993
=1.1302

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)
=((0 + 70.945) / 124.559) / ((0 + 65.804) / 133.038)
=0.56956944 / 0.4946256
=1.1515

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
=(-17.294 - 1.654 - -6.384) / 124.559
=-0.1009

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.

Radisys Corp has a M-score of -2.90 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.

Radisys Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.49110.56361.19931.0280.98681.21920.95881.30831.45130.5473
GMI 1.12120.93360.84530.99451.04890.95041.14121.00330.95131.0699
AQI 0.97121.13220.2681.12793.49080.84130.90180.86270.68960.8701
SGI 1.1121.14560.81670.93441.16370.86470.83140.81030.95771.1506
DEPI 0.75271.03351.12811.09071.06430.9430.93380.88150.89791.0428
SGAI 1.09470.92691.08641.08030.9950.99151.03251.14060.89180.9569
LVGI 1.0471.11471.08680.81890.95011.08071.18560.95841.1770.8718
TATA -0.095-0.3328-0.2462-0.0677-0.0567-0.2136-0.2771-0.1378-0.1271-0.1729
M-score -2.38-4.31-4.02-2.72-1.55-3.52-4.00-3.09-2.90-3.53

Radisys Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.30831.20020.94111.03241.45130.96241.04721.12670.54731.2612
GMI 1.00330.96660.87930.90450.95130.98461.02981.05881.06991.0354
AQI 0.86271.09141.06960.94750.68960.70350.63910.61420.87010.5953
SGI 0.81030.92570.98340.96910.95770.96671.05431.14421.15061.0199
DEPI 0.88150.88760.87720.89720.89790.89940.92361.01781.04281.0961
SGAI 1.14060.97780.8940.9290.89180.94260.93550.91050.95691.1302
LVGI 0.95840.90750.87670.95061.1771.13011.15151.16860.87181.1515
TATA -0.1378-0.1963-0.2108-0.2079-0.1271-0.1124-0.0604-0.0713-0.1729-0.1009
M-score -3.09-3.24-3.53-3.51-2.90-3.24-2.85-2.73-3.53-2.90
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