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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.
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 -2.38.
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 * 1.0048||+||0.528 * 1.0301||+||0.404 * 1.0008||+||0.892 * 1.0469||+||0.115 * 1.924|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9258||+||4.679 * 0.0073||-||0.327 * 1.4968|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $41.1 Mil.|
Revenue was 60.633 + 50.808 + 51.476 + 51.404 = $214.3 Mil.
Gross Profit was 43.096 + 40.533 + 41.512 + 41.792 = $166.9 Mil.
Total Current Assets was $103.9 Mil.
Total Assets was $634.3 Mil.
Property, Plant and Equipment(Net PPE) was $24.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.7 Mil.
Selling, General & Admin. Expense(SGA) was $50.7 Mil.
Total Current Liabilities was $69.8 Mil.
Long-Term Debt was $121.1 Mil.
Net Income was 16.547 + 18.015 + 13.579 + 15.417 = $63.6 Mil.
Non Operating Income was -0.043 + 0.618 + -0.475 + 0.335 = $0.4 Mil.
Cash Flow from Operations was 20.12 + 9.766 + 17.82 + 10.804 = $58.5 Mil.
|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 $545.4 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.
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)|
|=||(41.1 / 214.321)||/||(39.07 / 204.71)|
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)|
|=||(40.533 / 204.71)||/||(43.096 / 214.321)|
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 - (103.861 + 24.661) / 634.311)||/||(1 - (102.349 + 8.528) / 545.442)|
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))|
|=||(10.107 / (10.107 + 8.528))||/||(9.681 / (9.681 + 24.661))|
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)|
|=||(50.72 / 214.321)||/||(52.328 / 204.71)|
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)|
|=||((121.058 + 69.786) / 634.311)||/||((42.964 + 66.675) / 545.442)|
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|
|=||(63.558 - 0.435||-||58.51)||/||634.311|
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 -2.43 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