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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.75 (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.

Illumina Inc has a M-score of -2.75 suggests that the company is not a manipulator.

ILMN' s 10-Year Beneish M-Score Range
Min: -6.45   Max: 5.89
Current: -2.75

-6.45
5.89

During the past 13 years, the highest Beneish M-Score of Illumina Inc was 5.89. The lowest was -6.45. And the median was -2.57.


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 Illumina 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 * 0.909+0.528 * 0.9445+0.404 * 0.889+0.892 * 1.2927+0.115 * 1.0281
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7505+4.679 * -0.0717-0.327 * 1.263
=-2.75

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $277 Mil.
Revenue was 480.63 + 447.568 + 420.781 + 387.326 = $1,736 Mil.
Gross Profit was 333.941 + 300.54 + 278.292 + 259.246 = $1,172 Mil.
Total Current Assets was $1,907 Mil.
Total Assets was $3,278 Mil.
Property, Plant and Equipment(Net PPE) was $248 Mil.
Depreciation, Depletion and Amortization(DDA) was $110 Mil.
Selling, General & Admin. Expense(SGA) was $471 Mil.
Total Current Liabilities was $856 Mil.
Long-Term Debt was $980 Mil.
Net Income was 93.489 + 46.605 + 59.977 + 80.661 = $281 Mil.
Non Operating Income was 3.403 + -31.315 + 0.479 + 55.564 = $28 Mil.
Cash Flow from Operations was 145.605 + 178.03 + 37.087 + 126.839 = $488 Mil.
Accounts Receivable was $235 Mil.
Revenue was 356.8 + 346.094 + 330.958 + 309.265 = $1,343 Mil.
Gross Profit was 209.94 + 223.409 + 219.292 + 203.647 = $856 Mil.
Total Current Assets was $1,538 Mil.
Total Assets was $2,818 Mil.
Property, Plant and Equipment(Net PPE) was $194 Mil.
Depreciation, Depletion and Amortization(DDA) was $89 Mil.
Selling, General & Admin. Expense(SGA) was $485 Mil.
Total Current Liabilities was $419 Mil.
Long-Term Debt was $831 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)
=(276.675 / 1736.305) / (235.437 / 1343.117)
=0.159347 / 0.1752915
=0.909

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)
=(300.54 / 1343.117) / (333.941 / 1736.305)
=0.63753791 / 0.67500756
=0.9445

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 - (1906.954 + 247.643) / 3278.206) / (1 - (1537.646 + 193.649) / 2817.696)
=0.34275119 / 0.3855636
=0.889

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
=1736.305 / 1343.117
=1.2927

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))
=(89.377 / (89.377 + 193.649)) / (109.789 / (109.789 + 247.643))
=0.31579078 / 0.30716052
=1.0281

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)
=(470.677 / 1736.305) / (485.141 / 1343.117)
=0.27107968 / 0.36120532
=0.7505

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)
=((979.836 + 856.401) / 3278.206) / ((830.69 + 418.925) / 2817.696)
=0.56013472 / 0.44348823
=1.263

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
=(280.732 - 28.131 - 487.561) / 3278.206
=-0.0717

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.

Illumina Inc has a M-score of -2.75 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.

Illumina Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.44881.01980.90361.04611.02591.01830.77480.8981.13620.8983
GMI 0.871.07781.0091.06190.99630.92781.03730.99190.99751.0497
AQI 0.21191.70285.70081.41890.72350.83481.05850.94321.03291.6626
SGI 1.80431.45312.51131.98711.56281.16241.35481.16931.08811.2374
DEPI 0.37921.85451.09040.71471.07691.12590.85990.75811.14250.8662
SGAI 0.73550.76760.76950.94260.93541.02490.92281.17811.01521.235
LVGI 0.60011.07820.51935.0970.50841.05970.94191.62060.91830.8893
TATA 0.0964-0.1179-0.0128-0.2836-0.038-0.0707-0.0748-0.106-0.0717-0.1064
M-score -1.18-2.170.83-4.04-2.06-2.76-2.66-3.21-2.56-2.59

Illumina Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.00261.26371.13620.90350.89830.87530.89831.110.9840.909
GMI 0.97640.97170.99750.99791.02021.06621.04971.0471.01860.9445
AQI 1.0231.10531.03291.62141.53451.47591.66261.08141.11330.889
SGI 0.97231.02111.08811.15391.22451.2331.23741.25221.26751.2927
DEPI 0.96471.0571.14251.17291.04630.93780.86620.81820.91541.0281
SGAI 1.27651.21141.01521.2611.23131.15851.2350.74130.72130.7505
LVGI 1.00380.91210.91830.95570.94880.98270.88930.84441.21581.263
TATA -0.1168-0.0936-0.0717-0.0959-0.0857-0.0964-0.1064-0.0599-0.0763-0.0717
M-score -3.10-2.63-2.56-2.64-2.57-2.64-2.59-2.30-2.59-2.75
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