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Illumina Inc (NAS:ILMN)
Beneish M-Score
-2.51 (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 -2.51 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: -2.51

-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 -2.51.


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 * 1.0101+0.528 * 1.0102+0.404 * 1.0629+0.892 * 1.1384+0.115 * 1.15
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0319+4.679 * -0.0568-0.327 * 0.814
=-2.51

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $403 Mil.
Revenue was 571.763 + 591.548 + 550.271 + 539.378 = $2,253 Mil.
Gross Profit was 397.054 + 410.359 + 387.539 + 376.365 = $1,571 Mil.
Total Current Assets was $2,074 Mil.
Total Assets was $3,794 Mil.
Property, Plant and Equipment(Net PPE) was $385 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $559 Mil.
Total Current Liabilities was $481 Mil.
Long-Term Debt was $1,023 Mil.
Net Income was 89.587 + 104.477 + 118.177 + 102.247 = $414 Mil.
Non Operating Income was 1.452 + -1.282 + -1.811 + -0.9 = $-3 Mil.
Cash Flow from Operations was 39.738 + 240.378 + 180.994 + 171.445 = $633 Mil.
Accounts Receivable was $350 Mil.
Revenue was 538.565 + 512.379 + 480.63 + 447.568 = $1,979 Mil.
Gross Profit was 375.027 + 384.937 + 333.941 + 300.54 = $1,394 Mil.
Total Current Assets was $2,060 Mil.
Total Assets was $3,499 Mil.
Property, Plant and Equipment(Net PPE) was $281 Mil.
Depreciation, Depletion and Amortization(DDA) was $114 Mil.
Selling, General & Admin. Expense(SGA) was $476 Mil.
Total Current Liabilities was $710 Mil.
Long-Term Debt was $994 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)
=(402.514 / 2252.96) / (350.044 / 1979.142)
=0.17866007 / 0.17686654
=1.0101

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)
=(410.359 / 1979.142) / (397.054 / 2252.96)
=0.70457047 / 0.69744558
=1.0102

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 - (2073.798 + 385.253) / 3793.706) / (1 - (2060.281 + 280.628) / 3499.093)
=0.3518077 / 0.33099549
=1.0629

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
=2252.96 / 1979.142
=1.1384

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))
=(114.269 / (114.269 + 280.628)) / (129.536 / (129.536 + 385.253))
=0.28936406 / 0.25162931
=1.15

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)
=(559.053 / 2252.96) / (475.919 / 1979.142)
=0.24814156 / 0.24046733
=1.0319

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)
=((1022.646 + 481.228) / 3793.706) / ((993.777 + 710.251) / 3499.093)
=0.3964129 / 0.48699134
=0.814

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
=(414.488 - -2.541 - 632.555) / 3793.706
=-0.0568

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 -2.51 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 1.0091.06190.99630.92781.0241.00480.99751.04970.92030.9989
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 1.09040.71471.04271.16280.85990.75811.16220.85151.09341.1056
SGAI 0.76950.94260.93541.02490.9251.17521.01521.2350.70290.9322
LVGI 0.51935.0970.50841.05970.94191.62060.91830.88931.33020.8617
TATA 0.0032-0.3388-0.0282-0.0723-0.0748-0.106-0.0717-0.1064-0.0359-0.0557
M-score 0.91-4.30-2.02-2.77-2.67-3.20-2.56-2.59-2.57-2.41

Illumina Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.89831.110.9840.9090.92490.9121.10941.21221.11691.0101
GMI 1.04971.0471.01860.94450.92030.9120.91550.94820.99891.0102
AQI 1.66261.08141.11330.8890.89340.83440.80460.9490.95411.0629
SGI 1.23741.25221.26751.29271.30971.30981.28431.23281.19251.1384
DEPI 0.86620.81820.91541.02811.09341.15641.15721.07431.10561.15
SGAI 0.95080.53480.52780.54870.90881.18871.17221.18110.93921.0319
LVGI 0.88930.84441.21581.2631.33021.29330.8720.76120.86170.814
TATA -0.1064-0.0599-0.0763-0.0717-0.0359-0.0239-0.014-0.0154-0.0557-0.0568
M-score -2.54-2.27-2.56-2.72-2.61-2.62-2.28-2.14-2.41-2.51
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