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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.63 (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 -2.63 suggests that the company is not a manipulator.

IIVI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.05   Max: -1.41
Current: -2.63

-3.05
-1.41

During the past 13 years, the highest Beneish M-Score of II-VI Inc was -1.41. The lowest was -3.05. And the median was -2.56.


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 * 1.0145+0.528 * 0.963+0.404 * 0.9598+0.892 * 1.1532+0.115 * 1.1405
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9998+4.679 * -0.0466-0.327 * 1.2043
=-2.63

* 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 $156.0 Mil.
Revenue was 221.52 + 241.47 + 205.105 + 191.434 = $859.5 Mil.
Gross Profit was 87.602 + 92.611 + 77.669 + 71.344 = $329.2 Mil.
Total Current Assets was $584.6 Mil.
Total Assets was $1,228.5 Mil.
Property, Plant and Equipment(Net PPE) was $260.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $58.2 Mil.
Selling, General & Admin. Expense(SGA) was $166.4 Mil.
Total Current Liabilities was $154.2 Mil.
Long-Term Debt was $228.2 Mil.
Net Income was 16.294 + 14.343 + 14.938 + 18.991 = $64.6 Mil.
Non Operating Income was 1.402 + 0.429 + -1.257 + 0.994 = $1.6 Mil.
Cash Flow from Operations was 19.513 + 41.734 + 18.936 + 40.121 = $120.3 Mil.
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.



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)
=(155.954 / 859.529) / (133.305 / 745.335)
=0.18144123 / 0.17885246
=1.0145

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)
=(274.928 / 745.335) / (329.226 / 859.529)
=0.36886501 / 0.38303071
=0.963

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 - (584.564 + 260.912) / 1228.487) / (1 - (497.153 + 201.001) / 1034.026)
=0.31177456 / 0.32481969
=0.9598

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
=859.529 / 745.335
=1.1532

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))
=(52.827 / (52.827 + 201.001)) / (58.24 / (58.24 + 260.912))
=0.20812125 / 0.18248358
=1.1405

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)
=(166.415 / 859.529) / (144.329 / 745.335)
=0.19361185 / 0.19364313
=0.9998

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)
=((228.206 + 154.226) / 1228.487) / ((142.493 + 124.798) / 1034.026)
=0.31130325 / 0.25849543
=1.2043

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
=(64.566 - 1.568 - 120.304) / 1228.487
=-0.0466

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 -2.63 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.

II-VI Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.94311.03420.83491.54440.79091.08740.97951.04260.94821.0501
GMI 0.88641.1021.03630.96870.99691.14141.01891.06630.90650.968
AQI 0.97260.76661.04571.44220.86871.14741.33431.2410.9680.9887
SGI 1.13191.20140.92421.18091.4571.06331.04451.22361.08591.1149
DEPI 1.00221.10521.01020.99660.96610.85190.9511.16020.80691.0923
SGAI 1.01170.91931.03321.04110.88491.01551.06131.02150.95991.0038
LVGI 0.75060.67720.69591.55071.08840.83421.76691.38010.83731.1448
TATA -0.0312-0.0301-0.0334-0.06670.0094-0.0494-0.074-0.0566-0.0657-0.0484
M-score -2.55-2.32-2.72-2.16-2.29-2.41-2.93-2.48-2.78-2.62

II-VI Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.04081.2681.02960.95020.94980.79220.90241.0321.05011.0145
GMI 1.06791.07210.99180.93570.90510.89830.91860.9360.9680.963
AQI 1.2411.06531.04571.00570.9680.98050.9951.04870.98870.9598
SGI 1.22571.24561.16191.12531.08411.03651.04971.06711.11491.1532
DEPI 1.16021.05081.03251.1250.80690.83380.8050.9481.09231.1405
SGAI 1.01990.93480.96070.9510.96141.0081.01281.04091.00380.9998
LVGI 1.38011.11290.87290.82850.83730.78010.81051.11271.14481.2043
TATA -0.0566-0.031-0.0417-0.0558-0.0657-0.0858-0.0719-0.0471-0.0484-0.0466
M-score -2.48-2.11-2.44-2.63-2.78-3.05-2.87-2.68-2.62-2.63
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