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II-VI Inc (NAS:IIVI)
Beneish M-Score
-2.47 (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 -2.47 suggests that the company is not a manipulator.

IIVI' s 10-Year Beneish M-Score Range
Min: -3.05   Max: -1.4
Current: -2.47

-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 * 1.0085+0.528 * 1.0959+0.404 * 1.2032+0.892 * 1.2077+0.115 * 2.3945
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0356+4.679 * -0.0692-0.327 * 1.4554
=-2.47

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $126.2 Mil.
Revenue was 173.555 + 171.765 + 151.172 + 155.045 = $651.5 Mil.
Gross Profit was 54.69 + 53.394 + 56.346 + 50.86 = $215.3 Mil.
Total Current Assets was $515.7 Mil.
Total Assets was $1,090.1 Mil.
Property, Plant and Equipment(Net PPE) was $211.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.2 Mil.
Selling, General & Admin. Expense(SGA) was $131.4 Mil.
Total Current Liabilities was $135.1 Mil.
Long-Term Debt was $242.9 Mil.
Net Income was 8.531 + 7.569 + 9.694 + 10.026 = $35.8 Mil.
Non Operating Income was 1.694 + 1.125 + -0.067 + 0.442 = $3.2 Mil.
Cash Flow from Operations was 12.731 + 31.487 + 24.387 + 39.488 = $108.1 Mil.
Accounts Receivable was $103.6 Mil.
Revenue was 145.17 + 125.107 + 132.292 + 136.91 = $539.5 Mil.
Gross Profit was 51.001 + 47.268 + 48.835 + 48.262 = $195.4 Mil.
Total Current Assets was $440.9 Mil.
Total Assets was $848.8 Mil.
Property, Plant and Equipment(Net PPE) was $173.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.3 Mil.
Selling, General & Admin. Expense(SGA) was $105.1 Mil.
Total Current Liabilities was $81.1 Mil.
Long-Term Debt was $121.2 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)
=(126.228 / 651.537) / (103.64 / 539.479)
=0.19373881 / 0.19211128
=1.0085

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)
=(53.394 / 539.479) / (54.69 / 651.537)
=0.36213829 / 0.33043404
=1.0959

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 - (515.709 + 211.733) / 1090.064) / (1 - (440.908 + 173.206) / 848.789)
=0.3326612 / 0.27648214
=1.2032

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
=651.537 / 539.479
=1.2077

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))
=(28.299 / (28.299 + 173.206)) / (13.192 / (13.192 + 211.733))
=0.1404382 / 0.05865066
=2.3945

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)
=(131.424 / 651.537) / (105.084 / 539.479)
=0.20171379 / 0.19478793
=1.0356

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)
=((242.907 + 135.089) / 1090.064) / ((121.183 + 81.057) / 848.789)
=0.34676496 / 0.23826887
=1.4554

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
=(35.82 - 3.194 - 108.093) / 1090.064
=-0.0692

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 -2.47 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

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 1.00411.07220.97680.94311.03420.83491.54440.79091.0874
GMI 0.9761.03151.13260.88641.1020.97351.08450.94791.1414
AQI 0.92991.17970.71980.97260.76661.0461.44170.86871.1474
SGI 1.17661.28631.19831.13191.20140.92421.18091.4571.0633
DEPI 1.03570.95450.83061.00221.10521.01021.08120.81720.9284
SGAI 1.04650.9590.92661.01170.91931.05721.01350.88841.0155
LVGI 0.88121.30210.87650.75060.67720.69751.5471.08840.8342
TATA -0.07520.0173-0.0582-0.0312-0.0301-0.0329-0.06590.0094-0.0494
M-score -2.68-2.08-2.61-2.55-2.32-2.76-2.07-2.33-2.40

II-VI Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.87931.02151.08741.05851.07021.00050.98090.95481.0085
GMI 1.02761.08481.14141.15641.08271.03911.01550.99031.0959
AQI 1.09141.11721.14740.86711.20861.32811.33431.56241.2032
SGI 1.16631.09341.06331.014411.01881.0431.09071.2077
DEPI 0.96010.83050.92840.89171.03881.34571.82183.86422.3945
SGAI 1.00431.01941.01551.01771.02891.04821.06151.09481.0356
LVGI 1.01140.82230.83420.82821.6781.86251.76692.38941.4554
TATA -0.0138-0.0109-0.0471-0.0686-0.0734-0.0609-0.074-0.0674-0.0692
M-score -2.46-2.30-2.39-2.66-2.85-2.85-2.83-2.68-2.47
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