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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.28 (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 -2.28 suggests that the company is not a manipulator.

ILMN' s 10-Year Beneish M-Score Range
Min: -6.45   Max: 5.89
Current: -2.28

-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 -2.56.


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 * 1.1094+0.528 * 0.9155+0.404 * 0.8046+0.892 * 1.2843+0.115 * 1.1572
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1696+4.679 * -0.014-0.327 * 0.872
=-2.28

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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 $487 Mil.
Total Current Liabilities was $725 Mil.
Long-Term Debt was $1,001 Mil.
Net Income was 102.247 + 136.658 + 153.28 + 93.489 = $486 Mil.
Non Operating Income was -0.9 + 11.391 + -0.693 + 3.403 = $13 Mil.
Cash Flow from Operations was 171.445 + 66.779 + 140.549 + 145.605 = $524 Mil.
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 $324 Mil.
Total Current Liabilities was $649 Mil.
Long-Term Debt was $973 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)
=(368.611 / 2070.952) / (258.694 / 1612.475)
=0.17799109 / 0.16043287
=1.1094

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)
=(375.027 / 1612.475) / (376.365 / 2070.952)
=0.64994372 / 0.70994885
=0.9155

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 - (2237.691 + 302.84) / 3703.125) / (1 - (1620.721 + 230.113) / 3035.055)
=0.31394943 / 0.39018107
=0.8046

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
=2070.952 / 1612.475
=1.2843

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))
=(109.978 / (109.978 + 230.113)) / (117.443 / (117.443 + 302.84))
=0.32337815 / 0.2794379
=1.1572

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)
=(487.149 / 2070.952) / (324.306 / 1612.475)
=0.2352295 / 0.20112312
=1.1696

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)
=((1000.829 + 725.053) / 3703.125) / ((972.945 + 649.207) / 3035.055)
=0.46606096 / 0.53447203
=0.872

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
=(485.674 - 13.201 - 524.378) / 3703.125
=-0.014

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 -2.28 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.90350.89830.87530.89831.110.9840.9090.92490.9121.1094
GMI 0.99791.02021.06621.04971.0471.01860.94450.92030.9120.9155
AQI 1.62141.53451.47591.66261.08141.11330.8890.89340.83440.8046
SGI 1.15391.22451.2331.23741.25221.26751.29271.30971.30981.2843
DEPI 1.17291.04630.93780.86620.81820.91541.02811.09341.15641.1572
SGAI 1.2611.23131.15850.95710.53940.53210.56650.9071.18571.1696
LVGI 0.95570.94880.98270.88930.84441.21581.2631.33021.29330.872
TATA -0.0959-0.0857-0.0964-0.1064-0.0599-0.0763-0.0717-0.0359-0.0239-0.014
M-score -2.64-2.57-2.64-2.54-2.27-2.56-2.72-2.61-2.62-2.28
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