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Epiq Systems Inc (NAS:EPIQ)
Beneish M-Score
-3.02 (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.

Epiq Systems Inc has a M-score of -3.02 suggests that the company is not a manipulator.

EPIQ' s 10-Year Beneish M-Score Range
Min: -4.7   Max: -1.54
Current: -3.02

-4.7
-1.54

During the past 13 years, the highest Beneish M-Score of Epiq Systems Inc was -1.54. The lowest was -4.70. And the median was -2.47.


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 Epiq Systems 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 * 0.8079+0.528 * 1.0085+0.404 * 0.9363+0.892 * 1.1647+0.115 * 1.2108
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.159+4.679 * -0.0941-0.327 * 1.1317
=-3.02

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $138.1 Mil.
Revenue was 125.056 + 123.271 + 129.437 + 115.684 = $493.4 Mil.
Gross Profit was 58.089 + 58.833 + 64.542 + 57.993 = $239.5 Mil.
Total Current Assets was $182.7 Mil.
Total Assets was $723.8 Mil.
Property, Plant and Equipment(Net PPE) was $72.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $50.0 Mil.
Selling, General & Admin. Expense(SGA) was $170.2 Mil.
Total Current Liabilities was $58.9 Mil.
Long-Term Debt was $297.8 Mil.
Net Income was -3.419 + -2.298 + 0.096 + 4.235 = $-1.4 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 19.601 + -0.831 + 24.006 + 23.961 = $66.7 Mil.
Accounts Receivable was $146.8 Mil.
Revenue was 113.372 + 123.59 + 95.731 + 90.987 = $423.7 Mil.
Gross Profit was 55.772 + 51.552 + 50.28 + 49.75 = $207.4 Mil.
Total Current Assets was $160.5 Mil.
Total Assets was $690.9 Mil.
Property, Plant and Equipment(Net PPE) was $52.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $51.3 Mil.
Selling, General & Admin. Expense(SGA) was $126.1 Mil.
Total Current Liabilities was $60.1 Mil.
Long-Term Debt was $240.8 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)
=(138.117 / 493.448) / (146.791 / 423.68)
=0.27990183 / 0.34646667
=0.8079

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)
=(58.833 / 423.68) / (58.089 / 493.448)
=0.48941182 / 0.48527302
=1.0085

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 - (182.692 + 72.225) / 723.786) / (1 - (160.543 + 52.332) / 690.899)
=0.64780059 / 0.69188695
=0.9363

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
=493.448 / 423.68
=1.1647

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))
=(51.307 / (51.307 + 52.332)) / (49.954 / (49.954 + 72.225))
=0.49505495 / 0.40885913
=1.2108

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)
=(170.236 / 493.448) / (126.114 / 423.68)
=0.34499279 / 0.29766333
=1.159

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)
=((297.833 + 58.857) / 723.786) / ((240.796 + 60.071) / 690.899)
=0.49281141 / 0.43547175
=1.1317

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
=(-1.386 - 0 - 66.737) / 723.786
=-0.0941

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.

Epiq Systems Inc has a M-score of -3.02 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 own currency.

Epiq Systems Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.13861.88820.41531.30561.05690.88451.33371.30430.87631.0861
GMI 1.81680.84590.69461.0751.17880.9290.94210.98421.12311.1245
AQI 1.28060.99911.09930.94160.92930.94211.10641.02010.97280.8507
SGI 1.4481.08092.10820.7781.35381.01251.03391.14631.31681.2922
DEPI 0.96791.17960.77951.22751.050.98140.94730.85740.88891.3412
SGAI 1.05991.11050.82541.48670.83981.08941.05610.9960.90890.9857
LVGI 5.00081.59140.7540.45931.0180.85641.39021.77280.90341.2514
TATA -0.155-0.05830.0365-0.0443-0.0487-0.085-0.0429-0.0569-0.0784-0.0287
M-score -3.46-2.14-1.89-2.47-2.25-3.00-2.47-2.60-2.59-2.31

Epiq Systems Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.30650.90870.98340.87630.95361.18181.06661.08611.0250.8079
GMI 0.98791.06121.07931.12311.2151.15361.15161.12450.99911.0085
AQI 1.0050.99470.98890.97280.95410.91770.86660.85070.89650.9363
SGI 1.24171.29561.26591.31681.30761.26051.27751.29221.18021.1647
DEPI 0.81330.89610.940.88891.00751.06151.25641.34121.30581.2108
SGAI 1.05060.98060.94120.90890.81250.89590.93630.98561.16031.159
LVGI 1.74321.15941.13370.90340.94850.99441.19751.25141.15711.1317
TATA -0.0651-0.0991-0.0691-0.0784-0.04360.0032-0.0336-0.0287-0.0446-0.0941
M-score -2.56-2.79-2.58-2.59-2.31-1.99-2.33-2.31-2.59-3.02
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