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International Game Technology PLC (NYSE:IGT)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

IGT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.31   Max: -1.98
Current: -2.86

-3.31
-1.98

During the past 13 years, the highest Beneish M-Score of International Game Technology PLC was -1.98. The lowest was -3.31. And the median was -2.83.


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 * 0.7304+0.528 * 0.9345+0.404 * 1.0211+0.892 * 1.2329+0.115 * 0.7255
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0488+4.679 * -0.0571-0.327 * 1.0291
=-2.86

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $916 Mil.
Revenue was 1265.65 + 1285.469 + 1281.561 + 1364.957 = $5,198 Mil.
Gross Profit was 503.713 + 502.997 + 511.022 + 510.634 = $2,028 Mil.
Total Current Assets was $2,181 Mil.
Total Assets was $15,295 Mil.
Property, Plant and Equipment(Net PPE) was $1,522 Mil.
Depreciation, Depletion and Amortization(DDA) was $904 Mil.
Selling, General & Admin. Expense(SGA) was $958 Mil.
Total Current Liabilities was $2,326 Mil.
Long-Term Debt was $8,287 Mil.
Net Income was -1.903 + 72.696 + -92.774 + 73.501 = $52 Mil.
Non Operating Income was -18.236 + 87.577 + -168.882 + 89.031 = $-11 Mil.
Cash Flow from Operations was 97.19 + 318.202 + 205.605 + 315.003 = $936 Mil.
Accounts Receivable was $1,018 Mil.
Revenue was 1201.573 + 1274.284 + 848.242 + 891.805 = $4,216 Mil.
Gross Profit was 453.963 + 480.392 + 306.409 + 296.745 = $1,538 Mil.
Total Current Assets was $2,604 Mil.
Total Assets was $15,818 Mil.
Property, Plant and Equipment(Net PPE) was $1,473 Mil.
Depreciation, Depletion and Amortization(DDA) was $546 Mil.
Selling, General & Admin. Expense(SGA) was $741 Mil.
Total Current Liabilities was $1,917 Mil.
Long-Term Debt was $8,748 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)
=(916.315 / 5197.637) / (1017.554 / 4215.904)
=0.17629454 / 0.24136081
=0.7304

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)
=(1537.509 / 4215.904) / (2028.366 / 5197.637)
=0.3646926 / 0.39024772
=0.9345

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 - (2180.635 + 1522.344) / 15295.15) / (1 - (2604.173 + 1473.369) / 15818.375)
=0.75789848 / 0.7422275
=1.0211

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
=5197.637 / 4215.904
=1.2329

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))
=(545.94 / (545.94 + 1473.369)) / (904.335 / (904.335 + 1522.344))
=0.27035981 / 0.37266363
=0.7255

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)
=(957.536 / 5197.637) / (740.538 / 4215.904)
=0.18422525 / 0.17565343
=1.0488

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)
=((8286.69 + 2325.813) / 15295.15) / ((8747.737 + 1917.447) / 15818.375)
=0.69384759 / 0.67422754
=1.0291

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
=(51.52 - -10.51 - 936) / 15295.15
=-0.0571

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 -2.86 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.

International Game Technology PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.14671.24310.67340.9067
GMI 0.96381.47940.94540.9114
AQI 0.92190.99421.03361.1373
SGI 1.05540.94150.99551.23
DEPI 0.95641.15710.91440.8129
SGAI 1.06170.5991.11961.5317
LVGI 1.03130.98921.0141.1171
TATA -0.072-0.0529-0.1022-0.0493
M-score -2.71-2.21-3.31-2.73

International Game Technology PLC Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.05250.9640.65130.75110.97680.84740.91560.84510.65540.7304
GMI 1.82222.13320.78580.92060.740.60931.04770.88610.92060.9345
AQI 0.84041.01341.03361.02111.14251.16681.13731.1251.02861.0211
SGI 0.90980.89191.02920.95531.05531.14021.21811.41371.29891.2329
DEPI 4.0262.56232.2923.22961.19740.4540.32430.22050.45660.7255
SGAI 0.46520.3371.33861.1861.87982.84711.30211.50791.17121.0488
LVGI 1.01060.97611.0141.07351.11861.1591.11711.08971.0261.0291
TATA -0.0604-0.0596-0.1025-0.0877-0.0439-0.0519-0.0493-0.0599-0.0681-0.0571
M-score -1.99-1.98-3.27-2.99-2.90-3.31-2.68-2.75-2.98-2.86
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