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Epiq Systems Inc (NAS:EPIQ)
Beneish M-Score
-3.03 (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 -3.03 suggests that the company is not a manipulator.

EPIQ' s 10-Year Beneish M-Score Range
Min: -4.7   Max: -1.54
Current: -3.03

-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 -2.48.


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 * 0.9373+0.528 * 1.0187+0.404 * 0.9748+0.892 * 0.9761+0.115 * 0.9859
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0317+4.679 * -0.098-0.327 * 1.0032
=-3.03

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $129.8 Mil.
Revenue was 119.028 + 115.137 + 111.006 + 125.056 = $470.2 Mil.
Gross Profit was 57.495 + 55.653 + 55.986 + 58.089 = $227.2 Mil.
Total Current Assets was $196.5 Mil.
Total Assets was $731.2 Mil.
Property, Plant and Equipment(Net PPE) was $70.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.3 Mil.
Selling, General & Admin. Expense(SGA) was $161.9 Mil.
Total Current Liabilities was $60.1 Mil.
Long-Term Debt was $299.6 Mil.
Net Income was 1.733 + -0.63 + 5.01 + -3.419 = $2.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 3.824 + 32.358 + 18.594 + 19.601 = $74.4 Mil.
Accounts Receivable was $141.9 Mil.
Revenue was 123.271 + 129.437 + 115.684 + 113.372 = $481.8 Mil.
Gross Profit was 58.833 + 64.542 + 57.993 + 55.772 = $237.1 Mil.
Total Current Assets was $178.2 Mil.
Total Assets was $723.6 Mil.
Property, Plant and Equipment(Net PPE) was $73.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $49.7 Mil.
Selling, General & Admin. Expense(SGA) was $160.8 Mil.
Total Current Liabilities was $56.1 Mil.
Long-Term Debt was $298.6 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)
=(129.801 / 470.227) / (141.884 / 481.764)
=0.27603902 / 0.29450934
=0.9373

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)
=(55.653 / 481.764) / (57.495 / 470.227)
=0.49223271 / 0.48321981
=1.0187

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 - (196.494 + 70.217) / 731.224) / (1 - (178.15 + 73.893) / 723.587)
=0.63525404 / 0.65167561
=0.9748

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
=470.227 / 481.764
=0.9761

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))
=(49.66 / (49.66 + 73.893)) / (48.327 / (48.327 + 70.217))
=0.40193277 / 0.40767141
=0.9859

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)
=(161.941 / 470.227) / (160.815 / 481.764)
=0.34438899 / 0.33380452
=1.0317

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)
=((299.568 + 60.089) / 731.224) / ((298.628 + 56.121) / 723.587)
=0.49185612 / 0.49026447
=1.0032

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
=(2.694 - 0 - 74.377) / 731.224
=-0.098

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 -3.03 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.65840.46811.31871.05690.88451.33371.30430.87631.08610.8251
GMI 0.84590.69461.0751.17880.9290.94210.98421.12311.12450.9898
AQI 0.99911.09930.94160.92930.94211.10641.02010.97280.85070.9976
SGI 1.08092.10820.7781.35381.01251.03391.14631.31681.29220.9842
DEPI 1.17960.77951.22751.050.98140.94730.85740.88891.34121.0005
SGAI 1.11050.82541.48670.83981.08941.05610.9960.90890.98571.1387
LVGI 1.59140.7540.45931.0180.85641.39021.77280.90341.25140.984
TATA -0.05830.0365-0.0443-0.0487-0.085-0.0429-0.0569-0.0784-0.0287-0.0963
M-score -2.35-1.85-2.46-2.25-3.00-2.47-2.60-2.59-2.31-3.13

Epiq Systems Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.87630.95361.18181.06661.08611.0250.80790.84320.82510.9373
GMI 1.12311.2151.15361.15161.12450.99911.00850.98980.98981.0187
AQI 0.97280.95410.91770.86660.85070.89650.93631.00130.99760.9748
SGI 1.31681.30761.26051.27751.29221.18021.16471.09010.98420.9761
DEPI 0.88891.00751.06151.25641.34121.30581.21081.01081.00050.9859
SGAI 0.90890.81250.89590.93630.98581.16051.15921.16431.13871.0317
LVGI 0.90340.94850.99441.19751.25141.15711.13170.97750.9841.0032
TATA -0.0784-0.04360.0032-0.0336-0.0287-0.0446-0.0941-0.0867-0.0963-0.098
M-score -2.59-2.31-1.99-2.33-2.31-2.59-3.02-2.97-3.13-3.03
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