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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.
Ebix, Inc. has a M-score of -2.35 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Ebix, Inc. was 2.44. The lowest was -6.02. And the median was -2.35.
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 Ebix, 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 * 1.0202||+||0.528 * 1.008||+||0.404 * 0.9724||+||0.892 * 1.0268||+||0.115 * 0.8775|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0142||+||4.679 * 0.0115||-||0.327 * 0.8114|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $39.1 Mil.|
Revenue was 50.847 + 50.293 + 51.004 + 52.566 = $204.7 Mil.
Gross Profit was 40.761 + 40.157 + 40.646 + 42.675 = $164.2 Mil.
Total Current Assets was $102.3 Mil.
Total Assets was $553.9 Mil.
Property, Plant and Equipment(Net PPE) was $8.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.1 Mil.
Selling, General & Admin. Expense(SGA) was $52.3 Mil.
Total Current Liabilities was $66.7 Mil.
Long-Term Debt was $43.0 Mil.
Net Income was 15.245 + 13.143 + 13.542 + 17.344 = $59.3 Mil.
Non Operating Income was 1.656 + -4.166 + -1.548 + -0.088 = $-4.1 Mil.
Cash Flow from Operations was 19.286 + 12.937 + 10.574 + 14.265 = $57.1 Mil.
|Accounts Receivable was $37.3 Mil.
Revenue was 54.023 + 53.804 + 47.716 + 43.827 = $199.4 Mil.
Gross Profit was 43.576 + 44.304 + 38.559 + 34.798 = $161.2 Mil.
Total Current Assets was $81.7 Mil.
Total Assets was $516.9 Mil.
Property, Plant and Equipment(Net PPE) was $10.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.2 Mil.
Selling, General & Admin. Expense(SGA) was $50.2 Mil.
Total Current Liabilities was $56.7 Mil.
Long-Term Debt was $69.4 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(39.07 / 204.71)||/||(37.298 / 199.37)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(40.157 / 199.37)||/||(40.761 / 204.71)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (102.349 + 8.528) / 553.864)||/||(1 - (81.669 + 10.082) / 516.946)|
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.
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))|
|=||(9.155 / (9.155 + 10.082))||/||(10.107 / (10.107 + 8.528))|
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)|
|=||(52.328 / 204.71)||/||(50.249 / 199.37)|
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)|
|=||((42.964 + 66.675) / 553.864)||/||((69.432 + 56.69) / 516.946)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(59.274 - -4.146||-||57.062)||/||553.864|
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.
Ebix, Inc. has a M-score of -2.35 suggests that the company will not be a manipulator.
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
Ebix, Inc. Annual Data
Ebix, Inc. Quarterly Data