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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.48 (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 -2.48 suggests that the company is not a manipulator.

IIVI' s 10-Year Beneish M-Score Range
Min: -2.92   Max: -1.6
Current: -2.48

-2.92
-1.6

During the past 13 years, the highest Beneish M-Score of II-VI Inc was -1.60. The lowest was -2.92. 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 * 1.0352+0.528 * 1.0976+0.404 * 1.241+0.892 * 1.2324+0.115 * 0.9997
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0193+4.679 * -0.0566-0.327 * 1.3801
=-2.48

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $136.7 Mil.
Revenue was 187.921 + 173.555 + 171.765 + 151.172 = $684.4 Mil.
Gross Profit was 62.321 + 54.69 + 53.394 + 56.346 = $226.8 Mil.
Total Current Assets was $505.7 Mil.
Total Assets was $1,071.9 Mil.
Property, Plant and Equipment(Net PPE) was $208.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.8 Mil.
Selling, General & Admin. Expense(SGA) was $137.7 Mil.
Total Current Liabilities was $135.1 Mil.
Long-Term Debt was $222.0 Mil.
Net Income was 12.655 + 8.531 + 7.569 + 9.694 = $38.4 Mil.
Non Operating Income was 0.868 + 1.694 + 1.125 + -0.067 = $3.6 Mil.
Cash Flow from Operations was 26.857 + 12.731 + 31.487 + 24.387 = $95.5 Mil.
Accounts Receivable was $107.2 Mil.
Revenue was 154.03 + 143.94 + 125.107 + 132.292 = $555.4 Mil.
Gross Profit was 54.896 + 50.954 + 47.268 + 48.835 = $202.0 Mil.
Total Current Assets was $461.1 Mil.
Total Assets was $863.8 Mil.
Property, Plant and Equipment(Net PPE) was $170.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.1 Mil.
Selling, General & Admin. Expense(SGA) was $109.6 Mil.
Total Current Liabilities was $94.4 Mil.
Long-Term Debt was $114.0 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)
=(136.723 / 684.413) / (107.173 / 555.369)
=0.19976681 / 0.1929762
=1.0352

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)
=(54.69 / 555.369) / (62.321 / 684.413)
=0.36363751 / 0.33130727
=1.0976

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 - (505.731 + 208.939) / 1071.926) / (1 - (461.144 + 170.672) / 863.802)
=0.3332842 / 0.26856386
=1.241

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
=684.413 / 555.369
=1.2324

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))
=(34.135 / (34.135 + 170.672)) / (41.805 / (41.805 + 208.939))
=0.16666911 / 0.16672383
=0.9997

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)
=(137.726 / 684.413) / (109.637 / 555.369)
=0.2012323 / 0.19741289
=1.0193

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)
=((221.96 + 135.065) / 1071.926) / ((114.036 + 94.434) / 863.802)
=0.3330687 / 0.24134003
=1.3801

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
=(38.449 - 3.62 - 95.462) / 1071.926
=-0.0566

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 -2.48 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.02151.08741.05851.07021.00280.98480.95851.02441.00771.0352
GMI 1.08481.14141.15641.08271.0370.99140.96771.04051.07631.0976
AQI 1.11721.14740.86711.20861.32811.33431.56241.19911.20321.241
SGI 1.09341.06331.014411.01651.03881.08651.17841.20861.2324
DEPI 0.83050.92840.89171.03881.02781.10361.19481.08471.07540.9997
SGAI 1.01941.01551.01771.02891.04851.06191.09531.04311.03541.0193
LVGI 0.82230.83420.82821.6781.86251.76692.38941.42691.45541.3801
TATA -0.0109-0.0471-0.0686-0.0734-0.0609-0.074-0.0674-0.0558-0.0692-0.0566
M-score -2.30-2.39-2.66-2.85-2.88-2.92-2.99-2.59-2.63-2.48
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