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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 -7.92. And the median was -2.27.
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 * 1.1435||+||0.528 * 0.9817||+||0.404 * 0.8812||+||0.892 * 1.1272||+||0.115 * 0.9435|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0118||+||4.679 * 0.0176||-||0.327 * 1.1335|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $60.8 Mil.|
Revenue was 74.608 + 72.574 + 71.066 + 70.204 = $288.5 Mil.
Gross Profit was 52.183 + 51.995 + 51.464 + 53.76 = $209.4 Mil.
Total Current Assets was $185.4 Mil.
Total Assets was $761.1 Mil.
Property, Plant and Equipment(Net PPE) was $36.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.8 Mil.
Selling, General & Admin. Expense(SGA) was $67.2 Mil.
Total Current Liabilities was $71.3 Mil.
Long-Term Debt was $242.9 Mil.
Net Income was 24.067 + 22.992 + 22.159 + 21.929 = $91.1 Mil.
Non Operating Income was 1.74 + -0.195 + 0.469 + -0.354 = $1.7 Mil.
Cash Flow from Operations was 22.074 + 20.442 + 10.534 + 23.023 = $76.1 Mil.
|Accounts Receivable was $47.2 Mil.
Revenue was 66.813 + 64.712 + 63.753 + 60.633 = $255.9 Mil.
Gross Profit was 49.004 + 46.013 + 44.268 + 43.096 = $182.4 Mil.
Total Current Assets was $93.2 Mil.
Total Assets was $648.5 Mil.
Property, Plant and Equipment(Net PPE) was $33.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.2 Mil.
Selling, General & Admin. Expense(SGA) was $58.9 Mil.
Total Current Liabilities was $49.7 Mil.
Long-Term Debt was $186.5 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)|
|=||(60.795 / 288.452)||/||(47.166 / 255.911)|
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)|
|=||(182.381 / 255.911)||/||(209.402 / 288.452)|
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 - (185.383 + 36.187) / 761.115)||/||(1 - (93.24 + 33.583) / 648.479)|
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))|
|=||(10.171 / (10.171 + 33.583))||/||(11.83 / (11.83 + 36.187))|
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)|
|=||(67.226 / 288.452)||/||(58.949 / 255.911)|
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)|
|=||((242.892 + 71.321) / 761.115)||/||((186.506 + 49.68) / 648.479)|
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|
|=||(91.147 - 1.66||-||76.073)||/||761.115|
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 -2.26 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