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II-VI, Inc. (NAS:IIVI)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

IIVI' s 10-Year Beneish M-Score Range
Min: -3.05   Max: -1.4
Current: -2.6

-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 -2.53.


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 * 1.0207+0.528 * 1.064+0.404 * 1.1991+0.892 * 1.1827+0.115 * 0.9548
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0427+4.679 * -0.0558-0.327 * 1.4269
=-2.60

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $113.2 Mil.
Revenue was 171.765 + 151.172 + 155.045 + 145.17 = $623.2 Mil.
Gross Profit was 53.394 + 56.346 + 50.86 + 51.001 = $211.6 Mil.
Total Current Assets was $533.5 Mil.
Total Assets was $1,116.2 Mil.
Property, Plant and Equipment(Net PPE) was $225.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.0 Mil.
Selling, General & Admin. Expense(SGA) was $124.8 Mil.
Total Current Liabilities was $126.3 Mil.
Long-Term Debt was $262.9 Mil.
Net Income was 7.569 + 9.694 + 10.026 + 15.869 = $43.2 Mil.
Non Operating Income was 1.125 + -0.067 + 0.442 + 1.401 = $2.9 Mil.
Cash Flow from Operations was 31.487 + 24.387 + 39.488 + 7.142 = $102.5 Mil.
Accounts Receivable was $93.8 Mil.
Revenue was 125.107 + 132.292 + 136.91 + 132.59 = $526.9 Mil.
Gross Profit was 47.268 + 48.835 + 48.262 + 46.001 = $190.4 Mil.
Total Current Assets was $436.9 Mil.
Total Assets was $846.9 Mil.
Property, Plant and Equipment(Net PPE) was $184.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.0 Mil.
Selling, General & Admin. Expense(SGA) was $101.2 Mil.
Total Current Liabilities was $82.5 Mil.
Long-Term Debt was $124.5 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)
=(113.182 / 623.152) / (93.758 / 526.899)
=0.18162824 / 0.17794302
=1.0207

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)
=(56.346 / 526.899) / (53.394 / 623.152)
=0.36129505 / 0.33956563
=1.064

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 - (533.539 + 225.592) / 1116.161) / (1 - (436.92 + 184.025) / 846.86)
=0.31987321 / 0.26676782
=1.1991

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
=623.152 / 526.899
=1.1827

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))
=(37.028 / (37.028 + 184.025)) / (47.995 / (47.995 + 225.592))
=0.16750734 / 0.17542866
=0.9548

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)
=(124.793 / 623.152) / (101.196 / 526.899)
=0.20026093 / 0.19205958
=1.0427

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)
=((262.858 + 126.325) / 1116.161) / ((124.482 + 82.46) / 846.86)
=0.34867998 / 0.24436389
=1.4269

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
=(43.158 - 2.901 - 102.504) / 1116.161
=-0.0558

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 -2.60 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 1.00411.07220.97680.94311.03420.83491.54440.79091.08740.9795
GMI 0.9761.03151.13260.88641.1020.97351.08450.94791.14141.0189
AQI 0.92991.17970.71980.97260.76661.0461.44170.86871.14741.3343
SGI 1.17661.28631.19831.13191.20140.92421.18091.4571.06331.0445
DEPI 1.03570.95450.83061.00221.10521.01021.08120.81720.92840.951
SGAI 1.04650.9590.92661.01170.91931.05721.01350.88841.01551.0613
LVGI 0.88121.30210.87650.75060.67720.69751.5471.08840.83421.7669
TATA -0.07520.0173-0.0582-0.0312-0.0301-0.0329-0.06590.0094-0.0494-0.074
M-score -2.68-2.08-2.61-2.55-2.32-2.76-2.07-2.33-2.40-2.93

II-VI, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.84950.87931.02151.08741.05851.07021.00050.98090.95481.0207
GMI 0.96831.02761.08481.14141.15641.08271.03911.01550.99031.064
AQI 1.17321.09141.11721.14740.86711.20861.32811.33431.56241.1991
SGI 1.30361.16631.09341.06331.014411.01881.0431.09071.1827
DEPI 0.93330.96010.83050.92840.89171.03881.02560.9511.03850.9548
SGAI 0.93461.00431.01941.01551.01771.02891.04821.06151.09481.0427
LVGI 1.03121.01140.82230.83420.82821.6781.86251.76692.38941.4269
TATA 0.007-0.0138-0.0109-0.0471-0.0686-0.0734-0.0609-0.074-0.0674-0.0558
M-score -2.27-2.46-2.30-2.39-2.66-2.85-2.88-2.93-3.00-2.60
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