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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

IIVI' s 10-Year Beneish M-Score Range
Min: -2.92   Max: -1.6
Current: -2.76

-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 -2.51.


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 * 0.9482+0.528 * 0.9065+0.404 * 0.968+0.892 * 1.0859+0.115 * 0.9807
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9599+4.679 * -0.0657-0.327 * 0.8373
=-2.76

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $140.8 Mil.
Revenue was 196.683 + 182.709 + 176.736 + 185.833 = $742.0 Mil.
Gross Profit was 74.996 + 65.725 + 63.018 + 67.859 = $271.6 Mil.
Total Current Assets was $513.0 Mil.
Total Assets was $1,058.2 Mil.
Property, Plant and Equipment(Net PPE) was $203.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $53.1 Mil.
Selling, General & Admin. Expense(SGA) was $143.5 Mil.
Total Current Liabilities was $139.2 Mil.
Long-Term Debt was $156.0 Mil.
Net Income was 17.069 + 14.508 + 22.096 + 12.302 = $66.0 Mil.
Non Operating Income was 0.097 + -1.534 + 9.295 + -1.682 = $6.2 Mil.
Cash Flow from Operations was 43.663 + 36.259 + 48.588 + 0.856 = $129.4 Mil.
Accounts Receivable was $136.7 Mil.
Revenue was 187.921 + 173.555 + 171.765 + 150.02 = $683.3 Mil.
Gross Profit was 62.321 + 54.69 + 53.394 + 56.311 = $226.7 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 $53.1 Mil.
Selling, General & Admin. Expense(SGA) was $137.7 Mil.
Total Current Liabilities was $135.1 Mil.
Long-Term Debt was $222.0 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)
=(140.772 / 741.961) / (136.723 / 683.261)
=0.18972965 / 0.20010362
=0.9482

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)
=(65.725 / 683.261) / (74.996 / 741.961)
=0.33181464 / 0.36605428
=0.9065

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 - (512.968 + 203.812) / 1058.164) / (1 - (505.731 + 208.939) / 1071.926)
=0.32261918 / 0.3332842
=0.968

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
=741.961 / 683.261
=1.0859

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))
=(53.098 / (53.098 + 208.939)) / (53.083 / (53.083 + 203.812))
=0.20263551 / 0.20663306
=0.9807

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)
=(143.539 / 741.961) / (137.707 / 683.261)
=0.19345896 / 0.20154377
=0.9599

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)
=((155.957 + 139.156) / 1058.164) / ((221.96 + 135.065) / 1071.926)
=0.27889155 / 0.3330687
=0.8373

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
=(65.975 - 6.176 - 129.366) / 1058.164
=-0.0657

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 -2.76 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 0.97680.94311.03420.83491.54440.79091.08740.99251.02890.9482
GMI 1.13260.88641.1020.97351.08450.94791.14140.97621.1130.9065
AQI 0.71980.97260.76661.0461.44170.86871.14741.33431.2410.968
SGI 1.19831.13191.20140.92421.18091.4571.06331.03081.23991.0859
DEPI 0.83061.00221.10521.01021.08120.81720.92841.10360.99970.8069
SGAI 0.92661.01170.91931.05721.01350.88841.01551.06721.01580.9599
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 -2.61-2.55-2.32-2.76-2.07-2.33-2.40-2.93-2.47-2.78

II-VI Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.00280.98480.96051.02631.00951.03691.25881.0240.94710.9482
GMI 1.0370.99140.96591.03881.07461.09591.10291.01590.95630.9065
AQI 1.32811.33431.56241.19911.20321.2411.06531.04571.00570.968
SGI 1.01651.03881.08431.17621.20641.23031.25471.16831.12911.0859
DEPI 1.02781.10361.19481.08471.07540.82250.75780.75050.82390.9807
SGAI 1.04851.06191.09731.04491.03711.02090.93240.95870.94930.9599
LVGI 1.86251.76692.38941.42691.45541.38011.11290.87290.82850.8373
TATA -0.0609-0.074-0.0674-0.0558-0.0692-0.0566-0.031-0.0417-0.0558-0.0657
M-score -2.88-2.92-3.00-2.60-2.64-2.51-2.13-2.46-2.65-2.76
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