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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.
During the past 13 years, the highest Beneish M-Score of Idex Corp was -2.23. The lowest was -3.15. And the median was -2.60.
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 Idex Corp 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 * 1.0547||+||0.528 * 0.9924||+||0.404 * 1.0746||+||0.892 * 0.9535||+||0.115 * 1.0826|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9974||+||4.679 * -0.0312||-||0.327 * 1.0773|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $272 Mil.|
Revenue was 503.791 + 514.881 + 502.198 + 523.899 = $2,045 Mil.
Gross Profit was 223.26 + 231.615 + 226.041 + 229.117 = $910 Mil.
Total Current Assets was $906 Mil.
Total Assets was $2,870 Mil.
Property, Plant and Equipment(Net PPE) was $240 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $482 Mil.
Total Current Liabilities was $324 Mil.
Long-Term Debt was $853 Mil.
Net Income was 79.505 + 69.585 + 65.954 + 61.62 = $277 Mil.
Non Operating Income was 0.693 + -0.827 + 1.723 + 1.46 = $3 Mil.
Cash Flow from Operations was 113.353 + 99.024 + 49.404 + 101.378 = $363 Mil.
|Accounts Receivable was $270 Mil.
Revenue was 533.179 + 546.693 + 543.996 + 520.62 = $2,144 Mil.
Gross Profit was 234.646 + 241.132 + 244.42 + 227.009 = $947 Mil.
Total Current Assets was $1,077 Mil.
Total Assets was $2,939 Mil.
Property, Plant and Equipment(Net PPE) was $220 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $507 Mil.
Total Current Liabilities was $399 Mil.
Long-Term Debt was $720 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)|
|=||(272.008 / 2044.769)||/||(270.466 / 2144.488)|
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)|
|=||(231.615 / 2144.488)||/||(223.26 / 2044.769)|
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 - (906.399 + 240.27) / 2870.362)||/||(1 - (1076.957 + 219.824) / 2939.312)|
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))|
|=||(77.921 / (77.921 + 219.824))||/||(76.599 / (76.599 + 240.27))|
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)|
|=||(481.775 / 2044.769)||/||(506.564 / 2144.488)|
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)|
|=||((852.78 + 324.186) / 2870.362)||/||((720.173 + 398.551) / 2939.312)|
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|
|=||(276.664 - 3.049||-||363.159)||/||2870.362|
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.
Idex Corp has a M-score of -2.61 suggests that the company will not 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
Idex Corp Annual Data
Idex Corp Quarterly Data