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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.14 (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 -2.14 signals that the company is a manipulator.

ILMN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.42   Max: 5.89
Current: -2.14

-4.42
5.89

During the past 13 years, the highest Beneish M-Score of Illumina Inc was 5.89. The lowest was -4.42. 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 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 * 1.2122+0.528 * 0.9482+0.404 * 0.949+0.892 * 1.2328+0.115 * 1.0743
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.187+4.679 * -0.0154-0.327 * 0.7612
=-2.14

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $413 Mil.
Revenue was 550.271 + 539.378 + 538.565 + 512.379 = $2,141 Mil.
Gross Profit was 387.539 + 376.365 + 375.027 + 384.937 = $1,524 Mil.
Total Current Assets was $2,210 Mil.
Total Assets was $3,734 Mil.
Property, Plant and Equipment(Net PPE) was $309 Mil.
Depreciation, Depletion and Amortization(DDA) was $124 Mil.
Selling, General & Admin. Expense(SGA) was $507 Mil.
Total Current Liabilities was $584 Mil.
Long-Term Debt was $1,008 Mil.
Net Income was 118.177 + 102.247 + 136.658 + 153.28 = $510 Mil.
Non Operating Income was -1.811 + -0.9 + 11.391 + -0.693 = $8 Mil.
Cash Flow from Operations was 180.994 + 171.445 + 66.779 + 140.549 = $560 Mil.
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 $347 Mil.
Total Current Liabilities was $856 Mil.
Long-Term Debt was $980 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)
=(413.474 / 2140.593) / (276.675 / 1736.305)
=0.19315862 / 0.159347
=1.2122

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)
=(376.365 / 1736.305) / (387.539 / 2140.593)
=0.67500756 / 0.71189058
=0.9482

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 - (2210.428 + 308.722) / 3733.548) / (1 - (1906.954 + 247.643) / 3278.206)
=0.32526648 / 0.34275119
=0.949

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
=2140.593 / 1736.305
=1.2328

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))
=(109.789 / (109.789 + 247.643)) / (123.61 / (123.61 + 308.722))
=0.30716052 / 0.28591453
=1.0743

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)
=(507.396 / 2140.593) / (346.733 / 1736.305)
=0.23703525 / 0.19969591
=1.187

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)
=((1007.935 + 583.857) / 3733.548) / ((979.836 + 856.401) / 3278.206)
=0.42634834 / 0.56013472
=0.7612

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
=(510.362 - 7.987 - 559.767) / 3733.548
=-0.0154

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 -2.14 signals that the company is likely to 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.90361.04611.02591.01830.77480.8981.13620.89830.9249
GMI 1.0091.06190.99630.92781.03730.99190.99751.04970.9203
AQI 5.70081.41890.72350.83481.05850.94321.03291.66260.8934
SGI 2.51131.98711.56281.16241.35481.16931.08811.23741.3097
DEPI 1.09040.71471.07691.12590.85990.75811.14250.86621.0934
SGAI 0.76950.94260.93541.02490.92281.17811.01520.95710.907
LVGI 0.51935.0970.50841.05970.94191.62060.91830.88931.3302
TATA -0.0128-0.2836-0.038-0.0707-0.0748-0.106-0.0717-0.1064-0.0359
M-score 0.83-4.04-2.06-2.76-2.66-3.21-2.56-2.54-2.61

Illumina Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.87530.89831.110.9840.9090.92490.9121.10941.21221.1169
GMI 1.06621.04971.0471.01860.94450.92030.9120.91550.94820.9989
AQI 1.47591.66261.08141.11330.8890.89340.83440.80460.9490.9541
SGI 1.2331.23741.25221.26751.29271.30971.30981.28431.23281.1925
DEPI 0.93780.86620.81820.91541.02811.09341.15641.15721.07431.3881
SGAI 1.15850.95710.53940.53210.55290.91371.19431.1781.1870.9363
LVGI 0.98270.88930.84441.21581.2631.33021.29330.8720.76120.8617
TATA -0.0964-0.1064-0.0599-0.0763-0.0717-0.0359-0.0239-0.014-0.0154-0.0536
M-score -2.64-2.54-2.27-2.56-2.72-2.61-2.62-2.29-2.14-2.37
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