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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.61 (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 -2.61 suggests that the company is not a manipulator.

ILMN' s 10-Year Beneish M-Score Range
Min: -4.34   Max: 5.89
Current: -2.61

-4.34
5.89

During the past 13 years, the highest Beneish M-Score of Illumina Inc was 5.89. The lowest was -4.34. And the median was -2.56.


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 * 0.9249+0.528 * 0.9203+0.404 * 0.8934+0.892 * 1.3097+0.115 * 1.0934
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.907+4.679 * -0.0359-0.327 * 1.3302
=-2.61

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $289 Mil.
Revenue was 512.379 + 480.63 + 447.568 + 420.781 = $1,861 Mil.
Gross Profit was 384.937 + 333.941 + 300.54 + 278.292 = $1,298 Mil.
Total Current Assets was $1,890 Mil.
Total Assets was $3,340 Mil.
Property, Plant and Equipment(Net PPE) was $265 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $472 Mil.
Total Current Liabilities was $722 Mil.
Long-Term Debt was $987 Mil.
Net Income was 153.28 + 93.489 + 46.605 + 59.977 = $353 Mil.
Non Operating Income was -0.693 + 3.403 + -31.315 + 0.479 = $-28 Mil.
Cash Flow from Operations was 140.549 + 145.605 + 178.03 + 37.087 = $501 Mil.
Accounts Receivable was $239 Mil.
Revenue was 387.326 + 356.8 + 346.094 + 330.958 = $1,421 Mil.
Gross Profit was 259.246 + 209.94 + 223.409 + 219.292 = $912 Mil.
Total Current Assets was $1,618 Mil.
Total Assets was $3,019 Mil.
Property, Plant and Equipment(Net PPE) was $203 Mil.
Depreciation, Depletion and Amortization(DDA) was $98 Mil.
Selling, General & Admin. Expense(SGA) was $397 Mil.
Total Current Liabilities was $322 Mil.
Long-Term Debt was $839 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)
=(289.458 / 1861.358) / (238.946 / 1421.178)
=0.15550904 / 0.16813235
=0.9249

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)
=(333.941 / 1421.178) / (384.937 / 1861.358)
=0.64164165 / 0.69718453
=0.9203

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 - (1889.603 + 265.264) / 3339.64) / (1 - (1617.535 + 202.666) / 3019.006)
=0.35476069 / 0.39708599
=0.8934

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
=1861.358 / 1421.178
=1.3097

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))
=(97.925 / (97.925 + 202.666)) / (112.574 / (112.574 + 265.264))
=0.32577489 / 0.2979425
=1.0934

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)
=(471.921 / 1861.358) / (397.285 / 1421.178)
=0.25353586 / 0.27954626
=0.907

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)
=((986.78 + 722.158) / 3339.64) / ((839.305 + 322.063) / 3019.006)
=0.51171324 / 0.38468556
=1.3302

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
=(353.351 - -28.126 - 501.271) / 3339.64
=-0.0359

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 -2.61 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.01980.90361.04611.02591.01830.77480.8981.13620.89830.9249
GMI 1.07781.0091.06190.99630.92781.03730.99190.99751.04970.9203
AQI 1.70285.70081.41890.72350.83481.05850.94321.03291.66260.8934
SGI 1.45312.51131.98711.56281.16241.35481.16931.08811.23741.3097
DEPI 1.85451.09040.71471.07691.12590.85990.75811.14250.86621.0934
SGAI 0.76760.76950.94260.93541.02490.92281.17811.01520.95710.907
LVGI 1.07820.51935.0970.50841.05970.94191.62060.91830.88931.3302
TATA -0.1179-0.0128-0.2836-0.038-0.0707-0.0748-0.106-0.0717-0.1064-0.0359
M-score -2.170.83-4.04-2.06-2.76-2.66-3.21-2.56-2.54-2.61

Illumina Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.13620.90350.89830.87530.89831.110.9840.9090.92490.912
GMI 0.99750.99791.02021.06621.04971.0471.01860.94450.92030.912
AQI 1.03291.62141.53451.47591.66261.08141.11330.8890.89340.8344
SGI 1.08811.15391.22451.2331.23741.25221.26751.29271.30971.3098
DEPI 1.14251.17291.04630.93780.86620.81820.91541.02811.09341.4503
SGAI 1.01521.2611.23131.15850.95710.53940.53210.56650.9071.1857
LVGI 0.91830.95570.94880.98270.88930.84441.21581.2631.33021.2933
TATA -0.0717-0.0959-0.0857-0.0964-0.1064-0.0599-0.0763-0.0717-0.0359-0.0212
M-score -2.56-2.64-2.57-2.64-2.54-2.27-2.56-2.72-2.61-2.57
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