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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.11 (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 -2.11 signals that the company is a manipulator.

IIVI' s 10-Year Beneish M-Score Range
Min: -3.05   Max: -1.4
Current: -2.11

-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 -2.51.


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 * 1.2588+0.528 * 1.1029+0.404 * 1.0653+0.892 * 1.2547+0.115 * 0.9133
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9324+4.679 * -0.031-0.327 * 1.1129
=-2.11

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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 $43.5 Mil.
Selling, General & Admin. Expense(SGA) was $138.1 Mil.
Total Current Liabilities was $135.2 Mil.
Long-Term Debt was $216.7 Mil.
Net Income was 12.302 + 12.655 + 8.531 + 7.569 = $41.1 Mil.
Non Operating Income was -1.682 + 0.868 + 1.694 + 1.125 = $2.0 Mil.
Cash Flow from Operations was 0.856 + 26.857 + 12.731 + 31.487 = $71.9 Mil.
Accounts Receivable was $102.8 Mil.
Revenue was 150.02 + 154.03 + 143.94 + 125.107 = $573.1 Mil.
Gross Profit was 56.311 + 54.896 + 50.954 + 47.268 = $209.4 Mil.
Total Current Assets was $492.8 Mil.
Total Assets was $999.5 Mil.
Property, Plant and Equipment(Net PPE) was $195.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.9 Mil.
Selling, General & Admin. Expense(SGA) was $118.1 Mil.
Total Current Liabilities was $106.5 Mil.
Long-Term Debt was $191.1 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)
=(162.341 / 719.074) / (102.782 / 573.097)
=0.22576397 / 0.17934486
=1.2588

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)
=(62.321 / 573.097) / (67.859 / 719.074)
=0.36543377 / 0.33134837
=1.1029

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 - (502.93 + 207.303) / 1062.085) / (1 - (492.777 + 195.911) / 999.518)
=0.33128422 / 0.31097989
=1.0653

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
=719.074 / 573.097
=1.2547

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))
=(36.9 / (36.9 + 195.911)) / (43.53 / (43.53 + 207.303))
=0.15849767 / 0.17354176
=0.9133

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)
=(138.134 / 719.074) / (118.074 / 573.097)
=0.19209984 / 0.20602795
=0.9324

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)
=((216.733 + 135.216) / 1062.085) / ((191.072 + 106.548) / 999.518)
=0.33137555 / 0.29776352
=1.1129

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
=(41.057 - 2.005 - 71.931) / 1062.085
=-0.031

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 -2.11 signals that the company is likely to 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.08741.05851.07021.00280.98480.96051.02631.00951.03691.2588
GMI 1.14141.15641.08271.0370.99140.96591.03881.07461.09591.1029
AQI 1.14740.86711.20861.32811.33431.56241.19911.20321.2411.0653
SGI 1.06331.014411.01651.03881.08431.17621.20641.23031.2547
DEPI 0.92840.89171.03881.02781.10361.19481.08471.07540.99970.9133
SGAI 1.01551.01771.02891.04851.06191.09731.04491.03711.02090.9324
LVGI 0.83420.82821.6781.86251.76692.38941.42691.45541.38011.1129
TATA -0.0471-0.0686-0.0734-0.0609-0.074-0.0674-0.0558-0.0692-0.0566-0.031
M-score -2.39-2.66-2.85-2.88-2.92-3.00-2.60-2.64-2.49-2.11
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