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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 -2.35.
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 * 0.9265||+||0.528 * 1.0712||+||0.404 * 0.9701||+||0.892 * 1.2387||+||0.115 * 1.1855|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0027||+||4.679 * 0.0427||-||0.327 * 1.2674|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|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.
Net Income was 21.929 + 20.232 + 19.036 + 18.336 = $79.5 Mil.
Non Operating Income was -0.354 + 1.137 + 0.33 + 0.892 = $2.0 Mil.
Cash Flow from Operations was 23.023 + 15.508 + 17.497 + -7.342 = $48.7 Mil.
|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 $101.7 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.
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)|
|=||(47.171 / 265.482)||/||(41.1 / 214.321)|
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)|
|=||(49.004 / 214.321)||/||(53.76 / 265.482)|
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 - (116.83 + 34.088) / 675.989)||/||(1 - (101.748 + 24.661) / 634.311)|
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))|
|=||(9.681 / (9.681 + 24.661))||/||(10.634 / (10.634 + 34.088))|
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)|
|=||(62.995 / 265.482)||/||(50.72 / 214.321)|
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)|
|=||((206.5 + 51.266) / 675.989)||/||((121.058 + 69.786) / 634.311)|
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|
|=||(79.533 - 2.005||-||48.686)||/||675.989|
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 -2.18 signals that the company is likely to 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