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GuruFocus has detected 4 Warning Signs with IDEX Corp $IEX.
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IDEX Corp (NYSE:IEX)
Beneish M-Score
-2.61 (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.

IDEX Corp has a M-score of -2.61 suggests that the company is not a manipulator.

IEX' s Beneish M-Score Range Over the Past 10 Years
Min: -3   Max: -2.34
Current: -2.61

-3
-2.34

During the past 13 years, the highest Beneish M-Score of IDEX Corp was -2.34. The lowest was -3.00. And the median was -2.60.


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 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 * 1.0035+0.528 * 1.016+0.404 * 1.0891+0.892 * 1.0457+0.115 * 0.9431
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9954+4.679 * -0.0435-0.327 * 1.0239
=-2.61

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $275 Mil.
Revenue was 530.419 + 530.356 + 549.696 + 502.572 = $2,113 Mil.
Gross Profit was 232.485 + 230.889 + 244.058 + 223.335 = $931 Mil.
Total Current Assets was $823 Mil.
Total Assets was $3,155 Mil.
Property, Plant and Equipment(Net PPE) was $248 Mil.
Depreciation, Depletion and Amortization(DDA) was $87 Mil.
Selling, General & Admin. Expense(SGA) was $499 Mil.
Total Current Liabilities was $309 Mil.
Long-Term Debt was $1,014 Mil.
Net Income was 57.347 + 69.873 + 75.759 + 68.13 = $271 Mil.
Non Operating Income was 3.345 + 2.364 + 1.874 + 0.744 = $8 Mil.
Cash Flow from Operations was 115.593 + 125.481 + 88.478 + 70.365 = $400 Mil.
Accounts Receivable was $262 Mil.
Revenue was 499.798 + 503.791 + 514.881 + 502.198 = $2,021 Mil.
Gross Profit was 223.399 + 223.26 + 231.615 + 226.041 = $904 Mil.
Total Current Assets was $863 Mil.
Total Assets was $2,805 Mil.
Property, Plant and Equipment(Net PPE) was $241 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $479 Mil.
Total Current Liabilities was $310 Mil.
Long-Term Debt was $840 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)
=(275.25 / 2113.043) / (262.304 / 2020.668)
=0.13026238 / 0.12981054
=1.0035

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)
=(904.315 / 2020.668) / (930.767 / 2113.043)
=0.4475327 / 0.44048654
=1.016

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 - (822.721 + 247.816) / 3154.944) / (1 - (862.684 + 240.945) / 2805.443)
=0.66067956 / 0.6066115
=1.0891

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
=2113.043 / 2020.668
=1.0457

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))
=(78.12 / (78.12 + 240.945)) / (86.892 / (86.892 + 247.816))
=0.24484039 / 0.25960539
=0.9431

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)
=(498.994 / 2113.043) / (479.408 / 2020.668)
=0.23614948 / 0.23725224
=0.9954

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)
=((1014.235 + 309.158) / 3154.944) / ((839.707 + 309.597) / 2805.443)
=0.4194664 / 0.40966935
=1.0239

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
=(271.109 - 8.327 - 399.917) / 3154.944
=-0.0435

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.


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 local exchange's currency.

IDEX Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.98710.97091.01211.00630.98510.94920.93930.98111.07061.0035
GMI 0.9881.04311.0210.96111.01730.9770.95310.97620.98761.016
AQI 0.91121.1641.01410.90031.02610.93550.96390.95021.09521.0891
SGI 1.17641.09630.89271.13791.2151.0631.03581.06110.94081.0457
DEPI 0.85090.87970.86161.01940.93110.96110.97171.04431.05960.9431
SGAI 1.02380.99961.06170.96740.96870.99161.03790.99481.01020.9954
LVGI 1.00561.09610.77641.15471.17311.0240.971.0831.01461.0239
TATA -0.0229-0.047-0.0478-0.011-0.0077-0.1037-0.0506-0.0316-0.0284-0.0435
M-score -2.51-2.60-2.72-2.51-2.38-3.00-2.78-2.64-2.57-2.61

IDEX Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.98260.98110.91391.06541.05471.07061.15761.04551.03721.0035
GMI 0.9640.97620.98810.98960.99240.98760.99090.99921.00551.016
AQI 0.94530.95020.96671.06021.07461.09521.11171.01661.09441.0891
SGI 1.07531.06111.01560.98680.95350.94080.95970.99121.01841.0457
DEPI 1.03951.04431.0261.06051.08261.05961.08670.98570.98890.9431
SGAI 1.00930.99480.99861.00090.99741.01020.99550.99760.99960.9954
LVGI 0.99581.0831.11081.07921.07731.01461.0731.06771.05021.0239
TATA -0.0285-0.0316-0.0266-0.0292-0.0312-0.0284-0.031-0.0269-0.0328-0.0435
M-score -2.60-2.64-2.72-2.57-2.61-2.57-2.49-2.59-2.56-2.61
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