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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.44 (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.

II-VI Inc has a M-score of -2.44 suggests that the company is not a manipulator.

IIVI' s 10-Year Beneish M-Score Range
Min: -3.05   Max: -1.4
Current: -2.44

-3.05
-1.4

During the past 13 years, the highest Beneish M-Score of II-VI Inc was -1.40. The lowest was -3.05. And the median was -2.50.


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 II-VI Inc 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 * 1.024+0.528 * 1.0159+0.404 * 1.0457+0.892 * 1.1683+0.115 * 0.91
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9587+4.679 * -0.0417-0.327 * 0.8729
=-2.44

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $135.4 Mil.
Revenue was 176.736 + 185.833 + 187.921 + 173.555 = $724.0 Mil.
Gross Profit was 63.018 + 67.859 + 62.321 + 54.69 = $247.9 Mil.
Total Current Assets was $489.7 Mil.
Total Assets was $1,046.1 Mil.
Property, Plant and Equipment(Net PPE) was $206.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.2 Mil.
Selling, General & Admin. Expense(SGA) was $139.3 Mil.
Total Current Liabilities was $125.9 Mil.
Long-Term Debt was $192.5 Mil.
Net Income was 22.096 + 12.302 + 12.655 + 8.531 = $55.6 Mil.
Non Operating Income was 9.295 + -1.682 + 0.868 + 1.694 = $10.2 Mil.
Cash Flow from Operations was 48.588 + 0.856 + 26.857 + 12.731 = $89.0 Mil.
Accounts Receivable was $113.2 Mil.
Revenue was 171.765 + 150.02 + 154.03 + 143.94 = $619.8 Mil.
Gross Profit was 53.394 + 56.311 + 54.896 + 50.954 = $215.6 Mil.
Total Current Assets was $533.5 Mil.
Total Assets was $1,116.2 Mil.
Property, Plant and Equipment(Net PPE) was $225.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.2 Mil.
Selling, General & Admin. Expense(SGA) was $124.4 Mil.
Total Current Liabilities was $126.3 Mil.
Long-Term Debt was $262.9 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)
=(135.403 / 724.045) / (113.182 / 619.755)
=0.18700909 / 0.18262378
=1.024

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)
=(67.859 / 619.755) / (63.018 / 724.045)
=0.34780679 / 0.34236546
=1.0159

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 - (489.725 + 206.482) / 1046.117) / (1 - (533.539 + 225.592) / 1116.161)
=0.33448457 / 0.31987321
=1.0457

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
=724.045 / 619.755
=1.1683

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))
=(41.201 / (41.201 + 225.592)) / (42.204 / (42.204 + 206.482))
=0.15443059 / 0.16970799
=0.91

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)
=(139.305 / 724.045) / (124.371 / 619.755)
=0.19239826 / 0.20067769
=0.9587

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)
=((192.512 + 125.876) / 1046.117) / ((262.858 + 126.325) / 1116.161)
=0.30435219 / 0.34867998
=0.8729

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
=(55.584 - 10.175 - 89.032) / 1046.117
=-0.0417

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.

II-VI Inc has a M-score of -2.44 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.

II-VI Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 1.07220.97680.94311.03420.83491.54440.79091.08740.99251.0289
GMI 1.03151.13260.88641.1020.97351.08450.94791.14140.97621.113
AQI 1.17970.71980.97260.76661.0461.44170.86871.14741.33431.241
SGI 1.28631.19831.13191.20140.92421.18091.4571.06331.03081.2399
DEPI 0.95450.83061.00221.10521.01021.08120.81720.92841.10360.9997
SGAI 0.9590.92661.01170.91931.05721.01350.88841.01551.06721.0158
LVGI 1.30210.87650.75060.67720.69751.5471.08840.83421.76691.3801
TATA 0.0173-0.0582-0.0312-0.0301-0.0329-0.06590.0094-0.0494-0.074-0.0566
M-score -2.08-2.61-2.55-2.32-2.76-2.07-2.33-2.40-2.93-2.47

II-VI Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.05851.07021.00280.98480.96051.02631.00951.03691.25881.024
GMI 1.15641.08271.0370.99140.96591.03881.07461.09591.10291.0159
AQI 0.86711.20861.32811.33431.56241.19911.20321.2411.06531.0457
SGI 1.014411.01651.03881.08431.17621.20641.23031.25471.1683
DEPI 0.89171.03881.02781.10361.19481.08471.07540.99970.91330.91
SGAI 1.01771.02891.04851.06191.09731.04491.03711.02090.93240.9587
LVGI 0.82821.6781.86251.76692.38941.42691.45541.38011.11290.8729
TATA -0.0686-0.0734-0.0609-0.074-0.0674-0.0558-0.0692-0.0566-0.031-0.0417
M-score -2.66-2.85-2.88-2.92-3.00-2.60-2.64-2.49-2.11-2.44
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