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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.68 (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 -2.68 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: -2.68

-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 -2.54.


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 * 1.032+0.528 * 0.936+0.404 * 1.0487+0.892 * 1.0671+0.115 * 0.948
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0409+4.679 * -0.0471-0.327 * 1.1127
=-2.68

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $148.6 Mil.
Revenue was 205.105 + 191.434 + 189.207 + 196.683 = $782.4 Mil.
Gross Profit was 77.669 + 71.344 + 71.189 + 74.996 = $295.2 Mil.
Total Current Assets was $540.4 Mil.
Total Assets was $1,222.4 Mil.
Property, Plant and Equipment(Net PPE) was $253.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.6 Mil.
Selling, General & Admin. Expense(SGA) was $156.2 Mil.
Total Current Liabilities was $147.9 Mil.
Long-Term Debt was $242.9 Mil.
Net Income was 14.938 + 18.991 + 17.214 + 17.069 = $68.2 Mil.
Non Operating Income was -1.257 + 0.994 + 1.057 + 0.097 = $0.9 Mil.
Cash Flow from Operations was 18.936 + 40.121 + 22.179 + 43.663 = $124.9 Mil.
Accounts Receivable was $135.0 Mil.
Revenue was 182.709 + 176.736 + 185.833 + 187.921 = $733.2 Mil.
Gross Profit was 65.725 + 63.018 + 67.859 + 62.321 = $258.9 Mil.
Total Current Assets was $488.8 Mil.
Total Assets was $1,038.3 Mil.
Property, Plant and Equipment(Net PPE) was $202.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.6 Mil.
Selling, General & Admin. Expense(SGA) was $140.6 Mil.
Total Current Liabilities was $130.3 Mil.
Long-Term Debt was $168.0 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)
=(148.648 / 782.429) / (134.982 / 733.199)
=0.18998273 / 0.18410009
=1.032

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)
=(258.923 / 733.199) / (295.198 / 782.429)
=0.35314151 / 0.37728407
=0.936

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 - (540.386 + 253.142) / 1222.395) / (1 - (488.847 + 202.073) / 1038.268)
=0.35084159 / 0.33454561
=1.0487

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
=782.429 / 733.199
=1.0671

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))
=(41.622 / (41.622 + 202.073)) / (55.626 / (55.626 + 253.142))
=0.17079546 / 0.18015468
=0.948

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)
=(156.236 / 782.429) / (140.649 / 733.199)
=0.19968074 / 0.19182923
=1.0409

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)
=((242.871 + 147.896) / 1222.395) / ((168.002 + 130.299) / 1038.268)
=0.31967326 / 0.28730636
=1.1127

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
=(68.212 - 0.891 - 124.899) / 1222.395
=-0.0471

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 -2.68 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

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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.00991.04081.2681.02960.95020.94980.79220.90241.0321.0501
GMI 1.09211.06791.07210.99180.93570.90510.89830.91860.9360.968
AQI 1.20321.2411.06531.04571.00570.9680.98050.9951.04870.9887
SGI 1.2061.22571.24561.16191.12531.08411.03651.04971.06711.1149
DEPI 1.02461.16021.05081.03251.1250.80690.83380.8050.9481.0923
SGAI 1.03571.01990.93480.96070.9510.96141.0081.01281.04091.0038
LVGI 1.45541.38011.11290.87290.82850.83730.78010.81051.11271.1448
TATA -0.0692-0.0566-0.031-0.0417-0.0558-0.0657-0.0858-0.0719-0.0471-0.0484
M-score -2.63-2.48-2.11-2.44-2.63-2.78-3.05-2.87-2.68-2.62
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