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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

ILMN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.42   Max: 5.89
Current: -2.65

-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 -2.53.


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 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 * 0.9045+0.528 * 1.0147+0.404 * 1.0636+0.892 * 1.1172+0.115 * 1.3523
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0783+4.679 * -0.0612-0.327 * 0.8684
=-2.65

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $372 Mil.
Revenue was 600.124 + 571.763 + 591.548 + 550.271 = $2,314 Mil.
Gross Profit was 423.805 + 397.054 + 410.359 + 387.539 = $1,619 Mil.
Total Current Assets was $2,143 Mil.
Total Assets was $3,985 Mil.
Property, Plant and Equipment(Net PPE) was $511 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $582 Mil.
Total Current Liabilities was $582 Mil.
Long-Term Debt was $1,031 Mil.
Net Income was 120.412 + 89.587 + 104.477 + 118.177 = $433 Mil.
Non Operating Income was -0.15 + 1.452 + -1.282 + -1.811 = $-2 Mil.
Cash Flow from Operations was 217.047 + 39.738 + 240.378 + 180.994 = $678 Mil.
Accounts Receivable was $369 Mil.
Revenue was 539.378 + 538.565 + 512.379 + 480.63 = $2,071 Mil.
Gross Profit was 376.365 + 375.027 + 384.937 + 333.941 = $1,470 Mil.
Total Current Assets was $2,238 Mil.
Total Assets was $3,703 Mil.
Property, Plant and Equipment(Net PPE) was $303 Mil.
Depreciation, Depletion and Amortization(DDA) was $117 Mil.
Selling, General & Admin. Expense(SGA) was $483 Mil.
Total Current Liabilities was $725 Mil.
Long-Term Debt was $1,001 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)
=(372.48 / 2313.706) / (368.611 / 2070.952)
=0.16098847 / 0.17799109
=0.9045

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)
=(1470.27 / 2070.952) / (1618.757 / 2313.706)
=0.70994885 / 0.69963816
=1.0147

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 - (2143.021 + 511.354) / 3985.09) / (1 - (2237.691 + 302.84) / 3703.125)
=0.33392345 / 0.31394943
=1.0636

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
=2313.706 / 2070.952
=1.1172

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))
=(117.443 / (117.443 + 302.84)) / (133.189 / (133.189 + 511.354))
=0.2794379 / 0.20664098
=1.3523

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)
=(581.667 / 2313.706) / (482.819 / 2070.952)
=0.25140057 / 0.23313867
=1.0783

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)
=((1031.37 + 581.507) / 3985.09) / ((1000.829 + 725.053) / 3703.125)
=0.40472787 / 0.46606096
=0.8684

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
=(432.653 - -1.791 - 678.157) / 3985.09
=-0.0612

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 -2.65 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.90361.04611.02591.01830.77480.8981.13620.89830.92491.1169
GMI 1.0091.06190.99630.92781.03730.99190.99751.04970.92030.9989
AQI 5.70081.41890.72350.83481.05850.94321.03291.66260.89340.9541
SGI 2.51131.98711.56281.16241.35481.16931.08811.23741.30971.1925
DEPI 1.09040.71471.07691.12590.85990.75811.14250.86621.09341.1056
SGAI 0.76950.94260.93541.02490.92281.17811.01520.95080.90210.9435
LVGI 0.51935.0970.50841.05970.94191.62060.91830.88931.33020.8617
TATA 0.0032-0.3388-0.038-0.0707-0.0748-0.106-0.0717-0.1064-0.0359-0.0557
M-score 0.91-4.30-2.06-2.76-2.66-3.21-2.56-2.54-2.61-2.41

Illumina Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.110.9840.9090.92490.9121.10941.21221.11691.01010.9045
GMI 1.0471.01860.94450.92030.9120.91550.94820.99891.01021.0147
AQI 1.08141.11330.8890.89340.83440.80460.9490.95411.06291.0636
SGI 1.25221.26751.29271.30971.30981.28431.23281.19251.13841.1172
DEPI 0.81820.91541.02811.09341.15641.15721.07431.10561.151.3523
SGAI 0.53480.52780.54870.90881.18871.16861.17760.93651.02921.0783
LVGI 0.84441.21581.2631.33021.29330.8720.76120.86170.8140.8684
TATA -0.0599-0.0763-0.0717-0.0359-0.0239-0.014-0.0154-0.0557-0.0568-0.0612
M-score -2.27-2.56-2.72-2.61-2.62-2.28-2.14-2.41-2.51-2.65
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