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International Game Technology PLC (NYSE:IGT)
Beneish M-Score
-2.69 (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 PLC has a M-score of -2.69 suggests that the company is not a manipulator.

IGT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.89   Max: -2.69
Current: -2.69

-2.89
-2.69

During the past 13 years, the highest Beneish M-Score of International Game Technology PLC was -2.69. The lowest was -2.89. And the median was -2.79.


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 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 * 0.9141+0.528 * 0.9514+0.404 * 1.1373+0.892 * 1.22+0.115 * 1.386
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7701+4.679 * -0.0485-0.327 * 1.1248
=-2.69

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $937 Mil.
Revenue was 1316.39 + 1215.313 + 1290.08 + 874.662 = $4,696 Mil.
Gross Profit was 510.635 + 453.962 + 480.181 + 487.005 = $1,932 Mil.
Total Current Assets was $2,485 Mil.
Total Assets was $15,115 Mil.
Property, Plant and Equipment(Net PPE) was $1,477 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $749 Mil.
Total Current Liabilities was $2,011 Mil.
Long-Term Debt was $8,406 Mil.
Net Income was 82.356 + 7.133 + -116.89 + -29.163 = $-57 Mil.
Non Operating Income was 104.862 + 9.34 + -101.324 + -122.046 = $-109 Mil.
Cash Flow from Operations was 315.003 + 253.909 + 46.305 + 170.78 = $786 Mil.
Accounts Receivable was $840 Mil.
Revenue was 891.805 + 937.917 + 945.318 + 1074.478 = $3,850 Mil.
Gross Profit was 296.745 + 318.787 + 304.075 + 586.856 = $1,506 Mil.
Total Current Assets was $1,753 Mil.
Total Assets was $8,435 Mil.
Property, Plant and Equipment(Net PPE) was $1,210 Mil.
Depreciation, Depletion and Amortization(DDA) was $153 Mil.
Selling, General & Admin. Expense(SGA) was $347 Mil.
Total Current Liabilities was $2,989 Mil.
Long-Term Debt was $2,179 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)
=(937.193 / 4696.445) / (840.347 / 3849.518)
=0.1995537 / 0.21829928
=0.9141

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)
=(453.962 / 3849.518) / (510.635 / 4696.445)
=0.39133808 / 0.41132878
=0.9514

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 - (2485.374 + 1477.195) / 15114.692) / (1 - (1752.631 + 1209.968) / 8435.297)
=0.73783329 / 0.64878545
=1.1373

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
=4696.445 / 3849.518
=1.22

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))
=(152.681 / (152.681 + 1209.968)) / (129.921 / (129.921 + 1477.195))
=0.1120472 / 0.08084108
=1.386

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)
=(749.468 / 4696.445) / (347.043 / 3849.518)
=0.15958198 / 0.09015233
=1.7701

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)
=((8405.561 + 2010.626) / 15114.692) / ((2178.766 + 2989.483) / 8435.297)
=0.68914319 / 0.61269319
=1.1248

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
=(-56.564 - -109.168 - 785.997) / 15114.692
=-0.0485

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 PLC has a M-score of -2.69 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 PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

International Game Technology PLC Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.89941010.9141
GMI 0.78580.80830.66260.55260.9514
AQI 1.03361.02111.14251.16681.1373
SGI 1.02920.96231.06661.15531.22
DEPI 2.8832.66712.61661.51491.386
SGAI 0.83830.89650.89830.85551.7701
LVGI 1.0141.07351.11861.1591.1248
TATA -0.1025-0.0996-0.0427-0.0507-0.0485
M-score -2.89-2.89-3.50-2.72-2.69
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