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International Game Technology (NYSE:IGT)
Beneish M-Score
-1.81 (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.

International Game Technology has a M-score of -1.81 signals that the company is a manipulator.

IGT' s 10-Year Beneish M-Score Range
Min: -3.21   Max: -1.81
Current: -1.81

-3.21
-1.81

During the past 13 years, the highest Beneish M-Score of International Game Technology was -1.81. The lowest was -3.21. And the median was -2.64.


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 International Game Technology 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 * 1.7305+0.528 * 0.973+0.404 * 1.1576+0.892 * 0.8789+0.115 * 1.0305
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1274+4.679 * 0.0142-0.327 * 0.9747
=-1.81

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $530 Mil.
Revenue was 536.5 + 467.6 + 512.8 + 541.2 = $2,058 Mil.
Gross Profit was 327.1 + 284.9 + 292.8 + 309.8 = $1,215 Mil.
Total Current Assets was $1,221 Mil.
Total Assets was $3,990 Mil.
Property, Plant and Equipment(Net PPE) was $413 Mil.
Depreciation, Depletion and Amortization(DDA) was $189 Mil.
Selling, General & Admin. Expense(SGA) was $457 Mil.
Total Current Liabilities was $545 Mil.
Long-Term Debt was $1,879 Mil.
Net Income was 70.9 + 72.1 + 25.7 + 79.2 = $248 Mil.
Non Operating Income was -3.4 + 0.7 + -3.4 + -1.9 = $-8 Mil.
Cash Flow from Operations was 137.8 + 126.6 + -141.3 + 76.1 = $199 Mil.
Accounts Receivable was $349 Mil.
Revenue was 632.4 + 579 + 600 + 530.3 = $2,342 Mil.
Gross Profit was 356.7 + 337.2 + 341.3 + 309.5 = $1,345 Mil.
Total Current Assets was $1,776 Mil.
Total Assets was $4,613 Mil.
Property, Plant and Equipment(Net PPE) was $484 Mil.
Depreciation, Depletion and Amortization(DDA) was $232 Mil.
Selling, General & Admin. Expense(SGA) was $461 Mil.
Total Current Liabilities was $1,509 Mil.
Long-Term Debt was $1,366 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)
=(530.2 / 2058.1) / (348.6 / 2341.7)
=0.25761625 / 0.14886621
=1.7305

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)
=(284.9 / 2341.7) / (327.1 / 2058.1)
=0.57424094 / 0.59015597
=0.973

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 - (1221.1 + 412.7) / 3989.5) / (1 - (1776 + 483.9) / 4612.8)
=0.590475 / 0.51008065
=1.1576

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
=2058.1 / 2341.7
=0.8789

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))
=(231.6 / (231.6 + 483.9)) / (189 / (189 + 412.7))
=0.32368973 / 0.31411002
=1.0305

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)
=(456.5 / 2058.1) / (460.7 / 2341.7)
=0.22180652 / 0.19673741
=1.1274

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)
=((1878.6 + 544.8) / 3989.5) / ((1366.3 + 1508.5) / 4612.8)
=0.60744454 / 0.62322234
=0.9747

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
=(247.9 - -8 - 199.2) / 3989.5
=0.0142

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.

International Game Technology has a M-score of -1.81 signals that the company is likely to 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.

International Game Technology Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.95161.02041.11831.09880.91540.92381.11970.98530.92381.7304
GMI 1.0610.91630.96681.00651.03020.9660.96941.01091.00230.9729
AQI 1.00610.99761.05290.98691.07990.93570.95341.09050.88631.1576
SGI 0.95761.05561.04370.96460.8360.940.98481.0991.08880.8789
DEPI 0.85521.09591.04720.97740.98461.1520.98940.96270.93261.0305
SGAI 1.13531.11621.01531.19881.10510.86041.04351.0571.03041.1249
LVGI 1.0511.01041.42061.24330.97250.88450.93221.10091.07830.9747
TATA -0.0744-0.0404-0.0752-0.0237-0.0873-0.0961-0.0798-0.0463-0.03840.0143
M-score -2.93-2.66-2.81-2.65-3.08-3.02-2.78-2.63-2.73-1.81

International Game Technology Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87540.99990.99611.0121.08880.92370.99220.89340.95961.7305
GMI 1.03131.01040.9920.99120.97621.00211.01341.00751.00410.973
AQI 1.1021.09051.11790.98440.96610.88630.89740.99981.04141.1576
SGI 1.06111.08291.13671.13831.13651.08891.05240.98740.92040.8789
DEPI 0.9350.96270.93880.88570.92380.93260.94850.99241.01771.0305
SGAI 1.08721.05351.01580.9740.94211.03071.07951.17891.20911.1274
LVGI 1.16041.10091.08711.13850.94911.07831.15721.10791.09050.9747
TATA -0.0643-0.0463-0.0514-0.0415-0.037-0.0384-0.0330.0080.01470.0142
M-score -2.86-2.63-2.60-2.60-2.46-2.73-2.70-2.61-2.56-1.81
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