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GuruFocus has detected 6 Warning Signs with Ebix Inc $EBIX.
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Ebix Inc (NAS:EBIX)
Beneish M-Score
-2.23 (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.

Ebix Inc has a M-score of -2.23 suggests that the company is not a manipulator.

EBIX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.17   Max: 2.44
Current: -2.23

-6.17
2.44

During the past 13 years, the highest Beneish M-Score of Ebix Inc was 2.44. The lowest was -6.17. And the median was -2.40.


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 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 * 1.1832+0.528 * 1.0175+0.404 * 0.8919+0.892 * 1.1236+0.115 * 0.9807
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9771+4.679 * 0.0111-0.327 * 1.1406
=-2.23

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $62.7 Mil.
Revenue was 80.046 + 74.608 + 72.574 + 71.066 = $298.3 Mil.
Gross Profit was 57.524 + 52.183 + 51.995 + 51.464 = $213.2 Mil.
Total Current Assets was $209.9 Mil.
Total Assets was $803.8 Mil.
Property, Plant and Equipment(Net PPE) was $37.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.9 Mil.
Selling, General & Admin. Expense(SGA) was $69.2 Mil.
Total Current Liabilities was $89.7 Mil.
Long-Term Debt was $259.9 Mil.
Net Income was 24.629 + 24.067 + 22.992 + 22.159 = $93.8 Mil.
Non Operating Income was -0.839 + 1.74 + -0.195 + 0.469 = $1.2 Mil.
Cash Flow from Operations was 30.698 + 22.074 + 20.442 + 10.534 = $83.7 Mil.
Accounts Receivable was $47.2 Mil.
Revenue was 70.204 + 66.813 + 64.712 + 63.753 = $265.5 Mil.
Gross Profit was 53.76 + 49.004 + 46.013 + 44.268 = $193.0 Mil.
Total Current Assets was $116.8 Mil.
Total Assets was $676.0 Mil.
Property, Plant and Equipment(Net PPE) was $34.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General & Admin. Expense(SGA) was $63.0 Mil.
Total Current Liabilities was $51.3 Mil.
Long-Term Debt was $206.5 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)
=(62.713 / 298.294) / (47.171 / 265.482)
=0.21023889 / 0.1776806
=1.1832

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)
=(193.045 / 265.482) / (213.166 / 298.294)
=0.72714911 / 0.71461712
=1.0175

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 - (209.869 + 37.061) / 803.755) / (1 - (116.83 + 34.088) / 675.989)
=0.69277952 / 0.77674489
=0.8919

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
=298.294 / 265.482
=1.1236

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))
=(10.634 / (10.634 + 34.088)) / (11.862 / (11.862 + 37.061))
=0.23778006 / 0.24246265
=0.9807

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)
=(69.158 / 298.294) / (62.995 / 265.482)
=0.23184509 / 0.23728539
=0.9771

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)
=((259.853 + 89.712) / 803.755) / ((206.5 + 51.266) / 675.989)
=0.43491487 / 0.38131686
=1.1406

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
=(93.847 - 1.175 - 83.748) / 803.755
=0.0111

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 -2.23 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.

Ebix Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.75440.88231.28990.84140.93581.01531.02021.00480.92651.1832
GMI 0.95661.02881.03621.00790.96860.99071.0081.03011.07121.0175
AQI 0.63841.87961.00010.97641.06390.9990.96861.0050.97010.8919
SGI 1.46451.74491.30681.35321.27821.17991.02681.04691.23871.1236
DEPI 1.03390.93471.39550.76720.94890.96580.87751.9241.18550.9807
SGAI 0.9050.85890.87681.031.02581.06711.01420.92581.00270.9771
LVGI 0.9621.15070.590.73341.03261.11470.82391.49681.26741.1406
TATA -0.0189-0.00070.0133-0.001-0.0102-0.00740.01170.00730.04270.0111
M-score -2.52-1.59-1.66-2.27-2.35-2.40-2.35-2.43-2.18-2.23

Ebix Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.96571.00480.95460.99350.98270.92651.04640.95621.14351.1832
GMI 0.99861.03011.07381.11041.12921.07121.01820.98660.98171.0175
AQI 0.96091.0051.0320.99911.01460.97010.91760.91650.88120.8919
SGI 0.98391.04691.11361.17591.25121.23871.20351.16991.12721.1236
DEPI 1.72761.9242.14511.38091.32581.18551.04890.93810.94350.9807
SGAI 1.01490.92580.90.82260.91571.00271.04121.08221.01180.9771
LVGI 0.8941.49681.67342.23722.05741.26741.29491.29631.13351.1406
TATA 0.00430.00730.0410.04670.04020.04270.02180.02370.01760.0111
M-score -2.41-2.43-2.25-2.38-2.30-2.18-2.28-2.42-2.26-2.23
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