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Cyberonics Inc (NAS:CYBX)
Beneish M-Score
3.24 (As of Today)

Warning Sign:

Beneish M-Score 3.24 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Cyberonics Inc has a M-score of 3.24 signals that the company is a manipulator.

CYBX' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 7.02
Current: 3.24

-10000000
7.02

During the past 13 years, the highest Beneish M-Score of Cyberonics Inc was 7.02. The lowest was -10000000.00. And the median was -2.37.


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 Cyberonics 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 * 1.571+0.528 * 1.5289+0.404 * 6.6293+0.892 * 3.9721+0.115 * 0.5948
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8178+4.679 * -0.0121-0.327 * 0.8226
=3.24

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $284.3 Mil.
Revenue was 295.268 + 321.047 + 286.969 + 267.175 = $1,170.5 Mil.
Gross Profit was 188.814 + 190.393 + 163.402 + 136.964 = $679.6 Mil.
Total Current Assets was $647.3 Mil.
Total Assets was $2,497.0 Mil.
Property, Plant and Equipment(Net PPE) was $245.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $81.1 Mil.
Selling, General & Admin. Expense(SGA) was $441.5 Mil.
Total Current Liabilities was $316.9 Mil.
Long-Term Debt was $90.9 Mil.
Net Income was -1.569 + 8.957 + -40.378 + -16.941 = $-49.9 Mil.
Non Operating Income was 1.216 + 0.617 + -1.835 + -10.406 = $-10.4 Mil.
Cash Flow from Operations was 36.764 + 2.984 + 9.6 + -58.745 = $-9.4 Mil.
Accounts Receivable was $45.6 Mil.
Revenue was 67.521 + 81.011 + 74.072 + 72.065 = $294.7 Mil.
Gross Profit was 57.985 + 71.578 + 66.477 + 65.525 = $261.6 Mil.
Total Current Assets was $282.4 Mil.
Total Assets was $357.6 Mil.
Property, Plant and Equipment(Net PPE) was $40.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.0 Mil.
Selling, General & Admin. Expense(SGA) was $135.9 Mil.
Total Current Liabilities was $71.0 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)
=(284.345 / 1170.459) / (45.567 / 294.669)
=0.24293461 / 0.15463792
=1.571

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)
=(261.565 / 294.669) / (679.573 / 1170.459)
=0.887657 / 0.58060385
=1.5289

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 - (647.33 + 245.12) / 2496.96) / (1 - (282.406 + 40.574) / 357.647)
=0.64258538 / 0.09693077
=6.6293

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
=1170.459 / 294.669
=3.9721

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))
=(7.038 / (7.038 + 40.574)) / (81.068 / (81.068 + 245.12))
=0.14781988 / 0.24853152
=0.5948

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)
=(441.483 / 1170.459) / (135.911 / 294.669)
=0.37718792 / 0.46123277
=0.8178

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)
=((90.938 + 316.895) / 2496.96) / ((0 + 71.013) / 357.647)
=0.16333181 / 0.19855612
=0.8226

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
=(-49.931 - -10.408 - -9.397) / 2496.96
=-0.0121

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.

Cyberonics Inc has a M-score of 3.24 signals that the company is likely to 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.

Cyberonics Inc Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 1.08550.83531.14460.93741.00720.96140.89271.15811.15840.9653
GMI 0.97321.01311.04190.960.98290.99570.9660.99581.0120.9963
AQI 20.62150.9860.89030.624712.51621.15290.55330.78811.09210.9505
SGI 1.19331.0610.92561.18451.16831.13521.14721.16391.10891.0338
DEPI 1.78070.84490.85731.49571.22240.79891.63621.25291.12070.8625
SGAI 1.3230.92080.69220.83330.88720.8980.99720.94250.96690.9911
LVGI 4.1261.15850.93710.68350.34880.55330.78911.01120.92450.9795
TATA 0.0771-0.2193-0.1791-0.07580.2093-0.013-0.1812-0.11230.0034-0.0706
M-score 5.06-3.66-3.22-2.713.56-2.26-3.35-2.77-2.13-2.84

Cyberonics Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Dec15Mar16Jun16Sep16
DSRI 1.11511.07361.05761.08020.92051.73721.571
GMI 1.0071.00060.99721.00611.02091.54461.5289
AQI 1.09680.98350.95840.8360.83676.39616.6293
SGI 1.08471.06831.06111.05411.02153.13653.9721
DEPI 1.00980.96980.96140.93550.86290.68430.5948
SGAI 1.01011.00691.0050.94821.07040.96220.8178
LVGI 0.82310.90110.97861.28852.33361.5840.8226
TATA -0.0106-0.0392-0.048-0.0645-0.1964-0.0183-0.0121
M-score -2.25-2.51-2.61-2.82-3.972.273.24
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