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International Game Technology (NYSE:IGT)
Beneish M-Score
-2.54 (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 -2.54 suggests that the company is not a manipulator.

IGT' s 10-Year Beneish M-Score Range
Min: -3.23   Max: -1.64
Current: -2.54

-3.23
-1.64

During the past 13 years, the highest Beneish M-Score of International Game Technology was -1.64. The lowest was -3.23. And the median was -2.66.


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 * 0.9893+0.528 * 1.0041+0.404 * 1.0414+0.892 * 0.9204+0.115 * 1.0177
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2091+4.679 * 0.0147-0.327 * 1.0905
=-2.54

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $510 Mil.
Revenue was 467.6 + 512.8 + 541.2 + 632.4 = $2,154 Mil.
Gross Profit was 284.9 + 292.8 + 309.8 + 356.7 = $1,244 Mil.
Total Current Assets was $1,213 Mil.
Total Assets was $4,057 Mil.
Property, Plant and Equipment(Net PPE) was $436 Mil.
Depreciation, Depletion and Amortization(DDA) was $201 Mil.
Selling, General & Admin. Expense(SGA) was $481 Mil.
Total Current Liabilities was $522 Mil.
Long-Term Debt was $1,988 Mil.
Net Income was 72.1 + 25.7 + 79.2 + 63.5 = $241 Mil.
Non Operating Income was 0.7 + -3.4 + -1.9 + -3.2 = $-8 Mil.
Cash Flow from Operations was 126.6 + -141.3 + 76.1 + 127.4 = $189 Mil.
Accounts Receivable was $560 Mil.
Revenue was 579 + 600 + 530.3 + 631.1 = $2,340 Mil.
Gross Profit was 337.2 + 341.3 + 309.5 + 369.4 = $1,357 Mil.
Total Current Assets was $1,269 Mil.
Total Assets was $4,114 Mil.
Property, Plant and Equipment(Net PPE) was $499 Mil.
Depreciation, Depletion and Amortization(DDA) was $237 Mil.
Selling, General & Admin. Expense(SGA) was $432 Mil.
Total Current Liabilities was $1,465 Mil.
Long-Term Debt was $868 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)
=(510 / 2154) / (560.1 / 2340.4)
=0.2367688 / 0.23931807
=0.9893

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)
=(292.8 / 2340.4) / (284.9 / 2154)
=0.57998633 / 0.57762303
=1.0041

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 - (1212.6 + 435.6) / 4057.4) / (1 - (1269.3 + 499.2) / 4114.4)
=0.59377927 / 0.57016819
=1.0414

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
=2154 / 2340.4
=0.9204

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))
=(236.6 / (236.6 + 499.2)) / (201.2 / (201.2 + 435.6))
=0.32155477 / 0.31595477
=1.0177

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)
=(480.6 / 2154) / (431.9 / 2340.4)
=0.22311978 / 0.1845411
=1.2091

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)
=((1987.7 + 521.5) / 4057.4) / ((867.9 + 1465.4) / 4114.4)
=0.61842559 / 0.56710577
=1.0905

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
=(240.5 - -7.8 - 188.8) / 4057.4
=0.0147

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 -2.54 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.

International Game Technology Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 0.8161.07220.99361.07891.09271.10321.03181.04281.05490.9398
GMI 0.9691.0610.91630.96681.00651.03020.9660.96941.01091.0023
AQI 1.19121.00610.99761.05290.98691.07990.93570.95341.09050.8863
SGI 1.16760.95761.05561.04370.96460.8360.940.98481.0991.0888
DEPI 1.08260.85521.09591.04720.97740.98461.1520.98940.96270.9326
SGAI 0.87571.13531.11621.01531.19881.10510.86041.04351.0571.0304
LVGI 0.69841.0511.01041.42061.24330.97250.88450.93221.10091.0783
TATA 0.0035-0.0744-0.0404-0.0752-0.0237-0.0873-0.0961-0.0798-0.0463-0.0384
M-score -2.29-2.82-2.68-2.85-2.66-2.90-2.92-2.85-2.56-2.72

International Game Technology Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.99440.98911.07051.04030.99341.01950.93971.00550.96580.9893
GMI 1.00981.03131.01040.9920.99120.97621.00211.01341.00751.0041
AQI 1.09491.1021.09051.11790.98440.96610.88630.89740.99981.0414
SGI 1.03811.06111.08291.13671.13831.13651.08891.05240.98740.9204
DEPI 0.97650.9350.96270.93880.88570.92380.93260.94850.99241.0177
SGAI 1.05011.08721.05351.01580.9740.94211.03071.07951.17891.2091
LVGI 0.98431.16041.10091.08711.13850.94911.07831.15721.10791.0905
TATA -0.0617-0.0643-0.0463-0.0514-0.0415-0.037-0.0384-0.0330.0080.0147
M-score -2.70-2.75-2.56-2.56-2.62-2.52-2.72-2.69-2.55-2.54
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