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Epiq Systems Inc (NAS:EPIQ)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

EPIQ' s Beneish M-Score Range Over the Past 10 Years
Min: -4.76   Max: -1.5
Current: -2.77

-4.76
-1.5

During the past 13 years, the highest Beneish M-Score of Epiq Systems Inc was -1.50. The lowest was -4.76. And the median was -2.56.


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 * 0.9507+0.528 * 1.0091+0.404 * 0.9905+0.892 * 1.1889+0.115 * 0.8648
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9524+4.679 * -0.0879-0.327 * 0.9943
=-2.77

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $167.5 Mil.
Revenue was 140.744 + 146.531 + 144.632 + 142.535 = $574.4 Mil.
Gross Profit was 67.278 + 66.47 + 72.138 + 67.403 = $273.3 Mil.
Total Current Assets was $210.3 Mil.
Total Assets was $822.6 Mil.
Property, Plant and Equipment(Net PPE) was $70.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $57.5 Mil.
Selling, General & Admin. Expense(SGA) was $181.6 Mil.
Total Current Liabilities was $76.1 Mil.
Long-Term Debt was $383.9 Mil.
Net Income was -5.58 + -0.065 + 8.75 + -19.18 = $-16.1 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 13.214 + -10.341 + 34.51 + 18.865 = $56.2 Mil.
Accounts Receivable was $148.2 Mil.
Revenue was 138.01 + 119.028 + 115.137 + 111.006 = $483.2 Mil.
Gross Profit was 62.819 + 57.495 + 55.653 + 55.986 = $232.0 Mil.
Total Current Assets was $207.1 Mil.
Total Assets was $854.4 Mil.
Property, Plant and Equipment(Net PPE) was $78.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $50.2 Mil.
Selling, General & Admin. Expense(SGA) was $160.3 Mil.
Total Current Liabilities was $83.8 Mil.
Long-Term Debt was $396.7 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)
=(167.457 / 574.442) / (148.158 / 483.181)
=0.29151246 / 0.30663043
=0.9507

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)
=(231.953 / 483.181) / (273.289 / 574.442)
=0.48005406 / 0.4757469
=1.0091

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 - (210.279 + 70.329) / 822.557) / (1 - (207.141 + 78.91) / 854.371)
=0.6588589 / 0.66519112
=0.9905

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
=574.442 / 483.181
=1.1889

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))
=(50.214 / (50.214 + 78.91)) / (57.471 / (57.471 + 70.329))
=0.388882 / 0.44969484
=0.8648

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)
=(181.556 / 574.442) / (160.34 / 483.181)
=0.31605628 / 0.33184252
=0.9524

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)
=((383.863 + 76.137) / 822.557) / ((396.685 + 83.847) / 854.371)
=0.55923176 / 0.5624395
=0.9943

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
=(-16.075 - 0 - 56.248) / 822.557
=-0.0879

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 -2.77 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.46811.31871.05690.88451.33371.30430.87631.08610.82511.0401
GMI 0.69461.0751.17880.9290.94210.98421.12311.12450.98981.0088
AQI 1.09930.94160.92930.94211.10641.02010.97280.85070.99951.0483
SGI 2.10820.7781.35381.01251.03391.14631.31681.29220.98421.147
DEPI 0.77951.22751.050.98140.94730.85740.88891.34121.00050.9733
SGAI 0.82541.48670.83981.08941.05610.9960.90890.98571.13870.8891
LVGI 0.7540.45931.0180.85641.39021.77280.90341.25140.98241.1161
TATA 0.0018-0.0746-0.0487-0.085-0.0429-0.0569-0.0784-0.0287-0.0976-0.1132
M-score -2.01-2.60-2.25-3.00-2.47-2.60-2.59-2.31-3.14-2.84

Epiq Systems Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.0250.80790.84320.82510.93731.09551.06141.04011.03580.9507
GMI 0.99911.00850.98980.98981.01871.01091.02751.00881.02761.0091
AQI 0.89650.93631.00130.99950.97481.02681.04041.04831.03560.9905
SGI 1.18021.16471.09010.98420.97610.97921.05311.1471.21581.1889
DEPI 1.30581.21081.01081.00050.98591.05141.07050.97330.91960.8648
SGAI 1.16051.15921.16431.13871.03170.96180.9320.88910.90930.9524
LVGI 1.15711.13170.97750.98241.00321.14131.18471.11611.12960.9943
TATA -0.0446-0.0941-0.0867-0.0976-0.098-0.089-0.1216-0.1132-0.0975-0.0879
M-score -2.59-3.02-2.97-3.14-3.03-2.84-2.95-2.84-2.72-2.77
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