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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.41 (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 -2.41 suggests that the company is not a manipulator.

ILMN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.3   Max: 5.89
Current: -2.41

-4.3
5.89

During the past 13 years, the highest Beneish M-Score of Illumina Inc was 5.89. The lowest was -4.30. And the median was -2.48.


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 * 1.1169+0.528 * 0.9989+0.404 * 0.9541+0.892 * 1.1925+0.115 * 1.1056
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9404+4.679 * -0.0557-0.327 * 0.8617
=-2.41

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $386 Mil.
Revenue was 591.548 + 550.271 + 539.378 + 538.565 = $2,220 Mil.
Gross Profit was 410.359 + 387.539 + 376.365 + 375.027 = $1,549 Mil.
Total Current Assets was $2,097 Mil.
Total Assets was $3,688 Mil.
Property, Plant and Equipment(Net PPE) was $343 Mil.
Depreciation, Depletion and Amortization(DDA) was $126 Mil.
Selling, General & Admin. Expense(SGA) was $527 Mil.
Total Current Liabilities was $610 Mil.
Long-Term Debt was $1,016 Mil.
Net Income was 104.477 + 118.177 + 102.247 + 136.658 = $462 Mil.
Non Operating Income was -1.282 + -1.811 + -0.9 + 11.391 = $7 Mil.
Cash Flow from Operations was 240.378 + 180.994 + 171.445 + 66.779 = $660 Mil.
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 $470 Mil.
Total Current Liabilities was $722 Mil.
Long-Term Debt was $987 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)
=(385.529 / 2219.762) / (289.458 / 1861.358)
=0.17368033 / 0.15550904
=1.1169

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)
=(387.539 / 1861.358) / (410.359 / 2219.762)
=0.69718453 / 0.6979532
=0.9989

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 - (2096.823 + 342.694) / 3687.747) / (1 - (1889.603 + 265.264) / 3339.64)
=0.33848038 / 0.35476069
=0.9541

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
=2219.762 / 1861.358
=1.1925

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))
=(112.574 / (112.574 + 265.264)) / (126.419 / (126.419 + 342.694))
=0.2979425 / 0.26948518
=1.1056

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)
=(526.836 / 2219.762) / (469.77 / 1861.358)
=0.23733896 / 0.25238025
=0.9404

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)
=((1015.649 + 610.494) / 3687.747) / ((986.78 + 722.158) / 3339.64)
=0.4409584 / 0.51171324
=0.8617

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
=(461.559 - 7.398 - 659.596) / 3687.747
=-0.0557

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 -2.41 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

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 0.93780.86620.81820.91541.02811.09341.15641.15721.07431.1056
SGAI 1.15850.95080.53480.52780.54870.90881.19051.17391.18270.9404
LVGI 0.98270.88930.84441.21581.2631.33021.29330.8720.76120.8617
TATA -0.0964-0.1064-0.0599-0.0763-0.0717-0.0359-0.0239-0.014-0.0154-0.0557
M-score -2.64-2.54-2.27-2.56-2.72-2.61-2.62-2.28-2.14-2.41
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