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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.
Icon PLC has a M-score of -1.81 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Icon PLC was -0.83. The lowest was -4.65. And the median was -2.44.
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 Icon PLC 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 * 1.5076||+||0.528 * 0.9536||+||0.404 * 1.1416||+||0.892 * 1.1249||+||0.115 * 0.9277|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9999||+||4.679 * 0.0089||-||0.327 * 0.9341|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $570 Mil.|
Revenue was 506.404 + 476.544 + 450.062 + 445.598 = $1,879 Mil.
Gross Profit was 148.832 + 133.494 + 345.24 + 339.81 = $967 Mil.
Total Current Assets was $798 Mil.
Total Assets was $1,526 Mil.
Property, Plant and Equipment(Net PPE) was $160 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $756 Mil.
Total Current Liabilities was $503 Mil.
Long-Term Debt was $0 Mil.
Net Income was 40.783 + 36.195 + 33.48 + 27.808 = $138 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -54.916 + 38.66 + 97.421 + 43.589 = $125 Mil.
|Accounts Receivable was $336 Mil.
Revenue was 469.626 + 419.059 + 406.353 + 374.965 = $1,670 Mil.
Gross Profit was 119.988 + 114.428 + 300.164 + 285.502 = $820 Mil.
Total Current Assets was $710 Mil.
Total Assets was $1,293 Mil.
Property, Plant and Equipment(Net PPE) was $162 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $672 Mil.
Total Current Liabilities was $456 Mil.
Long-Term Debt was $0 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)|
|=||(569.896 / 1878.608)||/||(336.035 / 1670.003)|
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)|
|=||(133.494 / 1670.003)||/||(148.832 / 1878.608)|
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 - (798.097 + 160.17) / 1525.74)||/||(1 - (709.541 + 162.28) / 1293.122)|
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))|
|=||(44.167 / (44.167 + 162.28))||/||(48.008 / (48.008 + 160.17))|
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)|
|=||(756.21 / 1878.608)||/||(672.306 / 1670.003)|
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)|
|=||((0 + 502.586) / 1525.74)||/||((0 + 456.034) / 1293.122)|
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|
|=||(138.266 - 0||-||124.754)||/||1525.74|
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.
Icon PLC has a M-score of -1.81 signals that the company is likely to 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
Icon PLC Annual Data
Icon PLC Quarterly Data