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II-VI Inc (NAS:IIVI)
Beneish M-Score
-3.03 (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 -3.03 suggests that the company is not a manipulator.

IIVI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.05   Max: -1.4
Current: -3.03

-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 -2.54.


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 * 0.7922+0.528 * 0.8983+0.404 * 0.9805+0.892 * 1.0365+0.115 * 1.0049
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.008+4.679 * -0.0858-0.327 * 0.7801
=-3.03

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $133.3 Mil.
Revenue was 189.207 + 196.683 + 182.709 + 176.736 = $745.3 Mil.
Gross Profit was 71.189 + 74.996 + 65.725 + 63.018 = $274.9 Mil.
Total Current Assets was $497.2 Mil.
Total Assets was $1,034.0 Mil.
Property, Plant and Equipment(Net PPE) was $201.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.8 Mil.
Selling, General & Admin. Expense(SGA) was $144.3 Mil.
Total Current Liabilities was $124.8 Mil.
Long-Term Debt was $142.5 Mil.
Net Income was 17.214 + 17.069 + 14.508 + 22.096 = $70.9 Mil.
Non Operating Income was 1.057 + 0.097 + -1.534 + 9.295 = $8.9 Mil.
Cash Flow from Operations was 22.179 + 43.663 + 36.259 + 48.588 = $150.7 Mil.
Accounts Receivable was $162.3 Mil.
Revenue was 185.833 + 187.921 + 173.555 + 171.765 = $719.1 Mil.
Gross Profit was 67.859 + 62.321 + 54.69 + 53.394 = $238.3 Mil.
Total Current Assets was $502.9 Mil.
Total Assets was $1,062.1 Mil.
Property, Plant and Equipment(Net PPE) was $207.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.8 Mil.
Selling, General & Admin. Expense(SGA) was $138.1 Mil.
Total Current Liabilities was $135.2 Mil.
Long-Term Debt was $216.7 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)
=(133.305 / 745.335) / (162.341 / 719.074)
=0.17885246 / 0.22576397
=0.7922

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)
=(74.996 / 719.074) / (71.189 / 745.335)
=0.33134837 / 0.36886501
=0.8983

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 - (497.153 + 201.001) / 1034.026) / (1 - (502.93 + 207.303) / 1062.085)
=0.32481969 / 0.33128422
=0.9805

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
=745.335 / 719.074
=1.0365

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))
=(54.823 / (54.823 + 207.303)) / (52.827 / (52.827 + 201.001))
=0.20914751 / 0.20812125
=1.0049

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)
=(144.329 / 745.335) / (138.134 / 719.074)
=0.19364313 / 0.19209984
=1.008

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)
=((142.493 + 124.798) / 1034.026) / ((216.733 + 135.216) / 1062.085)
=0.25849543 / 0.33137555
=0.7801

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
=(70.887 - 8.915 - 150.689) / 1034.026
=-0.0858

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 -3.03 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

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 0.97680.94311.03420.83491.54440.79091.12580.95871.02890.9482
GMI 1.13260.88641.1020.97351.08450.94791.05541.05581.1130.9065
AQI 0.71980.97260.76661.0461.44170.86871.14741.33431.2410.968
SGI 1.19831.13191.20140.92421.18091.4571.02711.06711.23991.0859
DEPI 0.83061.00221.10521.01021.08120.81721.04480.84730.9520.9807
SGAI 0.92661.01170.91931.05721.01350.88841.0411.04111.01580.9599
LVGI 0.87650.75060.67720.69751.5471.08840.83421.76691.38010.8373
TATA -0.0582-0.0312-0.0301-0.0329-0.06590.0094-0.0494-0.074-0.0566-0.0657
M-score -2.61-2.55-2.32-2.76-2.07-2.33-2.43-2.92-2.48-2.76

II-VI Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.92730.99080.97531.03691.25881.0240.94710.94820.79220.9024
GMI 1.04661.12461.16121.09591.10291.01590.95630.90650.89830.9186
AQI 1.56241.19911.20321.2411.06531.04571.00570.9680.98050.995
SGI 1.1231.21841.24871.23031.25471.16831.12911.08591.03651.0497
DEPI 0.92840.85550.86290.9520.86970.85050.92540.98071.00490.9761
SGAI 1.071.01861.01141.02090.93240.95870.94930.95991.0081.0128
LVGI 2.38941.42691.45541.38011.11290.87290.82850.83730.78010.8105
TATA -0.0674-0.0558-0.0692-0.0566-0.031-0.0417-0.0558-0.0657-0.0858-0.0719
M-score -2.98-2.57-2.60-2.49-2.12-2.44-2.64-2.76-3.03-2.85
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