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GuruFocus has detected 2 Warning Signs with Tyler Technologies Inc $TYL.
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Tyler Technologies Inc (NYSE:TYL)
Beneish M-Score
-2.52 (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.

Tyler Technologies Inc has a M-score of -2.52 suggests that the company is not a manipulator.

TYL' s Beneish M-Score Range Over the Past 10 Years
Min: -116.59   Max: 48.1
Current: -2.52

-116.59
48.1

During the past 13 years, the highest Beneish M-Score of Tyler Technologies Inc was 48.10. The lowest was -116.59. And the median was -2.69.


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 Tyler Technologies Inc 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 * 0.9757+0.528 * 0.982+0.404 * 0.9362+0.892 * 1.2218+0.115 * 0.7435
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9535+4.679 * -0.053-0.327 * 0.7291
=-2.52

* 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 $163.7 Mil.
Revenue was 199.542 + 193.281 + 194.497 + 188.972 = $776.3 Mil.
Gross Profit was 94.348 + 92.817 + 93.48 + 86.936 = $367.6 Mil.
Total Current Assets was $271.6 Mil.
Total Assets was $1,355.7 Mil.
Property, Plant and Equipment(Net PPE) was $142.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $51.2 Mil.
Selling, General & Admin. Expense(SGA) was $169.5 Mil.
Total Current Liabilities was $322.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 32.306 + 51.642 + 22.264 + 18.872 = $125.1 Mil.
Non Operating Income was -0.19 + -0.285 + -0.526 + -0.72 = $-1.7 Mil.
Cash Flow from Operations was 48.179 + 70.621 + 67.091 + 12.826 = $198.7 Mil.
Accounts Receivable was $137.3 Mil.
Revenue was 179.293 + 158.916 + 150.845 + 146.295 = $635.3 Mil.
Gross Profit was 82.118 + 73.222 + 71.833 + 68.253 = $295.4 Mil.
Total Current Assets was $225.5 Mil.
Total Assets was $1,318.0 Mil.
Property, Plant and Equipment(Net PPE) was $114.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.0 Mil.
Selling, General & Admin. Expense(SGA) was $145.5 Mil.
Total Current Liabilities was $289.7 Mil.
Long-Term Debt was $140.0 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)
=(163.723 / 776.292) / (137.332 / 635.349)
=0.21090389 / 0.21615207
=0.9757

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)
=(295.426 / 635.349) / (367.581 / 776.292)
=0.46498224 / 0.47350868
=0.982

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 - (271.575 + 142.109) / 1355.681) / (1 - (225.536 + 114.291) / 1318.009)
=0.69485152 / 0.7421664
=0.9362

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
=776.292 / 635.349
=1.2218

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))
=(28.037 / (28.037 + 114.291)) / (51.224 / (51.224 + 142.109))
=0.19698865 / 0.26495218
=0.7435

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)
=(169.544 / 776.292) / (145.531 / 635.349)
=0.21840235 / 0.22905679
=0.9535

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 + 322.245) / 1355.681) / ((140 + 289.684) / 1318.009)
=0.23769972 / 0.32600991
=0.7291

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
=(125.084 - -1.721 - 198.717) / 1355.681
=-0.053

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.

Tyler Technologies Inc has a M-score of -2.52 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.

Tyler Technologies Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.97680.99790.96371.01341.02580.93860.93660.89321.30610.888
GMI 0.99720.92750.93360.99770.96920.99370.99540.97981.00910.9978
AQI 0.90671.22050.90991.07021.00771.01340.72270.80152.48510.962
SGI 1.12541.20611.0950.99431.07191.17431.14681.18351.19861.2792
DEPI 1.08371.65371.53540.8881.14230.94571.2480.96661.11840.5629
SGAI 0.8751.00861.01760.99661.01570.97610.98850.93071.02740.9802
LVGI 1.0341.2860.92860.98861.52270.77120.77970.94540.7280.9196
TATA -0.0762-0.1355-0.0583-0.0324-0.0896-0.0678-0.0578-0.1466-0.0515-0.0581
M-score -2.77-2.90-2.69-2.61-2.98-2.62-2.69-3.17-1.56-2.64

Tyler Technologies Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.89321.08060.89290.98411.30611.05321.0911.13050.8880.9757
GMI 0.97980.9810.99121.00221.00911.02111.0221.01590.99780.982
AQI 0.80150.82550.86740.94142.48512.4342.43672.40790.9620.9362
SGI 1.18351.18911.18171.17451.19861.23261.26181.28981.27921.2218
DEPI 0.96660.98250.98540.98281.11840.90810.74060.66950.56290.7435
SGAI 0.93070.92780.93590.95331.02741.05951.09011.09190.98020.9535
LVGI 0.94540.93570.84080.84330.7280.93750.92660.79110.91960.7291
TATA -0.1466-0.1055-0.0942-0.069-0.0515-0.0847-0.0755-0.0855-0.0581-0.053
M-score -3.17-2.78-2.85-2.63-1.56-2.03-1.95-1.91-2.64-2.52
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