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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.25 (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 -2.59 suggests that the company is not a manipulator.

ILMN' s 10-Year Beneish M-Score Range
Min: -6.45   Max: 5.91
Current: -2.25

-6.45
5.91

During the past 13 years, the highest Beneish M-Score of Illumina Inc was 5.91. The lowest was -6.45. And the median was -2.52.


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 * 0.984+0.528 * 1.0186+0.404 * 1.1133+0.892 * 1.2675+0.115 * 0.9154
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7213+4.679 * -0.0763-0.327 * 1.2158
=-2.59

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $259 Mil.
Revenue was 447.568 + 420.781 + 387.326 + 356.8 = $1,612 Mil.
Gross Profit was 300.54 + 278.292 + 259.246 + 209.94 = $1,048 Mil.
Total Current Assets was $1,621 Mil.
Total Assets was $3,035 Mil.
Property, Plant and Equipment(Net PPE) was $230 Mil.
Depreciation, Depletion and Amortization(DDA) was $110 Mil.
Selling, General & Admin. Expense(SGA) was $440 Mil.
Total Current Liabilities was $649 Mil.
Long-Term Debt was $973 Mil.
Net Income was 46.605 + 59.977 + 80.661 + 31.357 = $219 Mil.
Non Operating Income was -31.315 + 0.479 + 55.564 + 0.37 = $25 Mil.
Cash Flow from Operations was 178.03 + 37.087 + 126.839 + 83.136 = $425 Mil.
Accounts Receivable was $207 Mil.
Revenue was 346.094 + 330.958 + 309.265 + 285.874 = $1,272 Mil.
Gross Profit was 223.409 + 219.292 + 203.647 + 195.873 = $842 Mil.
Total Current Assets was $1,646 Mil.
Total Assets was $2,823 Mil.
Property, Plant and Equipment(Net PPE) was $187 Mil.
Depreciation, Depletion and Amortization(DDA) was $79 Mil.
Selling, General & Admin. Expense(SGA) was $481 Mil.
Total Current Liabilities was $419 Mil.
Long-Term Debt was $822 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)
=(258.694 / 1612.475) / (207.413 / 1272.191)
=0.16043287 / 0.16303605
=0.984

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)
=(278.292 / 1272.191) / (300.54 / 1612.475)
=0.66202402 / 0.64994372
=1.0186

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 - (1620.721 + 230.113) / 3035.055) / (1 - (1646.391 + 187.362) / 2823.202)
=0.39018107 / 0.35047049
=1.1133

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
=1612.475 / 1272.191
=1.2675

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))
=(78.788 / (78.788 + 187.362)) / (109.978 / (109.978 + 230.113))
=0.29602856 / 0.32337815
=0.9154

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)
=(439.675 / 1612.475) / (480.902 / 1272.191)
=0.27267089 / 0.37801085
=0.7213

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)
=((972.945 + 649.207) / 3035.055) / ((822.169 + 418.88) / 2823.202)
=0.53447203 / 0.43958916
=1.2158

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
=(218.6 - 25.098 - 425.092) / 3035.055
=-0.0763

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 -2.59 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 1.37361.01980.90361.04611.02591.01830.77480.8981.13620.8983
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 -1.25-2.170.83-4.04-2.06-2.76-2.66-3.21-2.56-2.59

Illumina Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.05571.00261.26371.13620.90350.89830.87530.89831.110.984
GMI 0.9860.97640.97170.99750.99791.02021.06621.04971.0471.0186
AQI 0.98741.0231.10531.03291.62141.53451.47591.66261.08141.1133
SGI 1.0530.97231.02111.08811.15391.22451.2331.23741.25221.2675
DEPI 0.87360.96471.0571.14251.17291.04630.93780.86620.81820.9154
SGAI 1.24981.27651.21141.01521.2611.23131.15851.2350.74130.7213
LVGI 0.99321.00380.91210.91830.95570.94880.98270.88930.84441.2158
TATA -0.101-0.1168-0.0936-0.0717-0.0959-0.0857-0.0964-0.1064-0.0599-0.0763
M-score -2.92-3.10-2.63-2.56-2.64-2.57-2.64-2.59-2.30-2.59
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