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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

IIVI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.06   Max: -1.41
Current: -2.65

-3.06
-1.41

During the past 13 years, the highest Beneish M-Score of II-VI Inc was -1.41. The lowest was -3.06. 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 * 1.1519
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0409+4.679 * -0.0471-0.327 * 1.1127
=-2.65

* 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 $52.9 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))
=(52.915 / (52.915 + 202.073)) / (55.626 / (55.626 + 253.142))
=0.20751957 / 0.18015468
=1.1519

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 -2.65 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 0.94311.03420.83491.54440.79091.12580.95871.02890.9482
GMI 0.88641.1020.97351.08450.94791.05541.05581.1130.9065
AQI 0.97260.76661.0461.44170.86871.14741.33431.2410.968
SGI 1.13191.20140.92421.18091.4571.02711.06711.23991.0859
DEPI 1.00221.10521.01021.08120.81721.04480.84730.9520.9807
SGAI 1.01170.91931.05721.01350.88841.0411.04111.01580.9599
LVGI 0.75060.67720.69751.5471.08840.83421.76691.38010.8373
TATA -0.0312-0.0301-0.0334-0.06590.0094-0.0494-0.074-0.0566-0.0657
M-score -2.55-2.32-2.76-2.07-2.33-2.43-2.92-2.48-2.76

II-VI Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.97531.03691.25881.0240.94710.94820.79220.90241.0321.0501
GMI 1.16121.09591.10291.01590.95630.90650.89830.91860.9360.968
AQI 1.20321.2411.06531.04571.00570.9680.98050.9951.04871.0011
SGI 1.24871.23031.25471.16831.12911.08591.03651.04971.06711.1149
DEPI 0.86290.9520.86970.85050.92540.98071.00490.97611.15191.4076
SGAI 1.01141.02090.93240.95870.94930.95991.0081.01281.04091.0038
LVGI 1.45541.38011.11290.87290.82850.83730.78010.81051.11271.1381
TATA -0.0692-0.0566-0.031-0.0417-0.0558-0.0657-0.0858-0.0719-0.0471-0.0481
M-score -2.60-2.49-2.12-2.44-2.64-2.76-3.03-2.85-2.65-2.57
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