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IRIDEX Corp (NAS:IRIX)
Beneish M-Score
-2.33 (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.

IRIDEX Corp has a M-score of -2.33 suggests that the company is not a manipulator.

IRIX' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 10000000
Current: -2.33

-10000000
10000000

During the past 13 years, the highest Beneish M-Score of IRIDEX Corp was 10000000.00. The lowest was -10000000.00. And the median was -2.31.


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 IRIDEX Corp 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 * 1.0526+0.528 * 1.0619+0.404 * 1.1407+0.892 * 1.0969+0.115 * 0.9446
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9886+4.679 * -0.0045-0.327 * 1.1556
=-2.33

* 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 $8.45 Mil.
Revenue was 11.908 + 11.931 + 12.113 + 9.815 = $45.77 Mil.
Gross Profit was 5.734 + 5.297 + 5.485 + 4.841 = $21.36 Mil.
Total Current Assets was $32.67 Mil.
Total Assets was $43.75 Mil.
Property, Plant and Equipment(Net PPE) was $1.19 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.56 Mil.
Selling, General & Admin. Expense(SGA) was $15.77 Mil.
Total Current Liabilities was $8.66 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.328 + 0.101 + 0.438 + 0.442 = $0.65 Mil.
Non Operating Income was -0.021 + -0.011 + -0.131 + 0.164 = $0.00 Mil.
Cash Flow from Operations was 1.302 + 0.526 + -0.239 + -0.739 = $0.85 Mil.
Accounts Receivable was $7.32 Mil.
Revenue was 9.033 + 10.796 + 11.778 + 10.118 = $41.73 Mil.
Gross Profit was 4.217 + 5.41 + 5.901 + 5.149 = $20.68 Mil.
Total Current Assets was $31.93 Mil.
Total Assets was $41.17 Mil.
Property, Plant and Equipment(Net PPE) was $1.08 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.47 Mil.
Selling, General & Admin. Expense(SGA) was $14.54 Mil.
Total Current Liabilities was $7.06 Mil.
Long-Term Debt was $0.00 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)
=(8.45 / 45.767) / (7.319 / 41.725)
=0.18463085 / 0.17541043
=1.0526

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)
=(20.677 / 41.725) / (21.357 / 45.767)
=0.49555422 / 0.46664627
=1.0619

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 - (32.672 + 1.188) / 43.745) / (1 - (31.933 + 1.079) / 41.167)
=0.22596868 / 0.19809556
=1.1407

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
=45.767 / 41.725
=1.0969

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))
=(0.469 / (0.469 + 1.079)) / (0.561 / (0.561 + 1.188))
=0.30297158 / 0.32075472
=0.9446

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)
=(15.765 / 45.767) / (14.539 / 41.725)
=0.34446217 / 0.34844817
=0.9886

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)
=((0 + 8.663) / 43.745) / ((0 + 7.055) / 41.167)
=0.19803406 / 0.17137513
=1.1556

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
=(0.653 - 0.001 - 0.85) / 43.745
=-0.0045

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.

IRIDEX Corp has a M-score of -2.33 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.

IRIDEX Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.94730.94821.0571.37070.72940.99110.96681.18571.01471.1415
GMI 0.93711.19771.07840.808611.02081.01760.99410.97141.0463
AQI 1.1676.7050.29540.86471.64780.83870.65910.72735.66561.2149
SGI 0.96961.54670.87390.665811.02631.02111.13041.11860.9753
DEPI 0.8440.4740.88332.09520.80840.84111.18880.98921.30451.1327
SGAI 1.53030.99990.7310.947811.01411.07160.87930.99541.0442
LVGI 1.24562.98980.97830.79410.67890.88080.79430.99270.771.0556
TATA -0.1087-0.5198-0.28610.0392-0.054-0.01370.06140.05450.17410.0254
M-score -3.22-2.77-4.08-2.21-2.64-2.56-2.26-2.030.43-2.15

IRIDEX Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.97071.01431.16961.01471.09170.99181.02611.14151.16971.0526
GMI 0.98280.97610.97090.97140.97340.99461.00881.04631.08691.0619
AQI 0.7480.84320.90725.66565.60765.89616.15871.21491.23421.1407
SGI 1.14991.1641.12821.11861.09121.01660.99490.97530.9911.0969
DEPI 1.10911.34091.30281.30451.51111.27471.1621.13270.87690.9446
SGAI 0.91140.95581.03780.99541.01751.04331.04351.04420.99940.9886
LVGI 0.97870.9020.98250.770.92760.89180.87921.05561.04171.1556
TATA 0.01440.020.00270.17410.16510.16930.21210.02540.0239-0.0045
M-score -2.38-2.22-2.220.430.390.350.67-2.15-2.11-2.33
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