Switch to:
Epiq Systems Inc (NAS:EPIQ)
Beneish M-Score
-2.59 (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 -2.59 suggests that the company is not a manipulator.

EPIQ' s 10-Year Beneish M-Score Range
Min: -4.7   Max: -1.54
Current: -2.59

-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 -2.43.


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 * 1.025+0.528 * 0.9991+0.404 * 0.8965+0.892 * 1.1802+0.115 * 1.3058
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1604+4.679 * -0.0446-0.327 * 1.1571
=-2.59

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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.
Net Income was -2.298 + 0.096 + 4.235 + 2.842 = $4.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -0.831 + 24.006 + 23.961 + -10.024 = $37.1 Mil.
Accounts Receivable was $117.3 Mil.
Revenue was 123.59 + 95.731 + 90.987 + 97.895 = $408.2 Mil.
Gross Profit was 51.552 + 50.28 + 49.75 + 49.172 = $200.8 Mil.
Total Current Assets was $134.1 Mil.
Total Assets was $664.7 Mil.
Property, Plant and Equipment(Net PPE) was $47.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.5 Mil.
Selling, General & Admin. Expense(SGA) was $117.4 Mil.
Total Current Liabilities was $57.8 Mil.
Long-Term Debt was $223.8 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)
=(141.884 / 481.764) / (117.282 / 408.203)
=0.29450934 / 0.28731293
=1.025

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)
=(64.542 / 408.203) / (58.833 / 481.764)
=0.49179942 / 0.49223271
=0.9991

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 - (178.15 + 73.893) / 723.587) / (1 - (134.061 + 47.492) / 664.729)
=0.65167561 / 0.72687667
=0.8965

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
=481.764 / 408.203
=1.1802

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))
=(52.455 / (52.455 + 47.492)) / (49.66 / (49.66 + 73.893))
=0.52482816 / 0.40193277
=1.3058

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)
=(160.797 / 481.764) / (117.415 / 408.203)
=0.33376716 / 0.28763875
=1.1604

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)
=((298.628 + 56.121) / 723.587) / ((223.822 + 57.831) / 664.729)
=0.49026447 / 0.42371102
=1.1571

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
=(4.875 - 0 - 37.112) / 723.587
=-0.0446

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 -2.59 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.30431.30650.90870.98340.87630.95361.18181.06661.08611.025
GMI 0.98420.98791.06121.07931.12311.2151.15361.15161.12450.9991
AQI 1.02011.0050.99470.98890.97280.95410.91770.86660.85070.8965
SGI 1.14631.24171.29561.26591.31681.30761.26051.27751.29221.1802
DEPI 0.85740.81330.89610.940.88891.00751.06151.25641.34121.3058
SGAI 0.9961.05060.98060.94120.90890.81250.89590.93640.98571.1604
LVGI 1.77281.74321.15941.13370.90340.94850.99441.19751.25141.1571
TATA -0.0569-0.0651-0.0991-0.0691-0.0784-0.04360.0032-0.0336-0.0287-0.0446
M-score -2.60-2.56-2.79-2.58-2.59-2.31-1.99-2.33-2.31-2.59
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide