Switch to:
IRIDEX Corp (NAS:IRIX)
Beneish M-Score
-2.15 (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 -2.15 signals that the company is a manipulator.

IRIX' s Beneish M-Score Range Over the Past 10 Years
Min: -4.08   Max: 0.43
Current: -2.15

-4.08
0.43

During the past 13 years, the highest Beneish M-Score of IRIDEX Corp was 0.43. The lowest was -4.08. And the median was -2.23.


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 * 1.1415+0.528 * 1.0463+0.404 * 1.2149+0.892 * 0.9753+0.115 * 1.1327
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0442+4.679 * 0.0254-0.327 * 1.0556
=-2.15

* 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 $9.28 Mil.
Revenue was 12.113 + 9.815 + 9.033 + 10.796 = $41.76 Mil.
Gross Profit was 5.485 + 4.841 + 4.217 + 5.41 = $19.95 Mil.
Total Current Assets was $30.77 Mil.
Total Assets was $41.82 Mil.
Property, Plant and Equipment(Net PPE) was $1.10 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.52 Mil.
Selling, General & Admin. Expense(SGA) was $14.45 Mil.
Total Current Liabilities was $7.43 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.438 + 0.442 + -0.652 + 0.246 = $0.47 Mil.
Non Operating Income was -0.131 + 0.164 + -0.023 + -0.007 = $0.00 Mil.
Cash Flow from Operations was -0.239 + -0.739 + -0.232 + 0.617 = $-0.59 Mil.
Accounts Receivable was $8.34 Mil.
Revenue was 11.778 + 10.118 + 10.589 + 10.329 = $42.81 Mil.
Gross Profit was 5.901 + 5.149 + 5.3 + 5.055 = $21.41 Mil.
Total Current Assets was $32.89 Mil.
Total Assets was $41.82 Mil.
Property, Plant and Equipment(Net PPE) was $0.74 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.42 Mil.
Selling, General & Admin. Expense(SGA) was $14.19 Mil.
Total Current Liabilities was $7.04 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)
=(9.282 / 41.757) / (8.337 / 42.814)
=0.22228608 / 0.19472602
=1.1415

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)
=(4.841 / 42.814) / (5.485 / 41.757)
=0.49995329 / 0.47783605
=1.0463

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 - (30.769 + 1.104) / 41.823) / (1 - (32.894 + 0.735) / 41.818)
=0.23790737 / 0.19582476
=1.2149

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
=41.757 / 42.814
=0.9753

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))
=(0.42 / (0.42 + 0.735)) / (0.522 / (0.522 + 1.104))
=0.36363636 / 0.32103321
=1.1327

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)
=(14.451 / 41.757) / (14.189 / 42.814)
=0.34607371 / 0.33141029
=1.0442

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 + 7.431) / 41.823) / ((0 + 7.039) / 41.818)
=0.17767735 / 0.16832464
=1.0556

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
=(0.474 - 0.003 - -0.593) / 41.823
=0.0254

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 -2.15 signals that the company is likely to 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 -0.1087-0.5198-0.28610.0392-0.054-0.01370.06140.04350.14410.0254
M-score -3.22-2.77-4.08-2.21-2.64-2.56-2.26-2.080.29-2.15

IRIDEX Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.94151.18570.97071.01431.16961.01471.09170.99181.02611.1415
GMI 1.01690.99410.98280.97610.97090.97140.97340.99461.00881.0463
AQI 0.80320.72730.7480.84320.90725.66565.60765.89616.15871.2149
SGI 1.10981.13041.14991.1641.12821.11861.09121.01660.99490.9753
DEPI 1.11480.98921.10911.34091.30281.30451.51111.27471.1621.1327
SGAI 0.8240.87930.91140.95581.03780.99541.01751.04331.04351.0442
LVGI 1.03710.99270.97870.9020.98250.770.92760.89180.87921.0556
TATA 0.01550.05450.01440.020.00270.17410.16510.16930.21210.0254
M-score -2.40-2.03-2.38-2.22-2.220.430.390.350.67-2.15
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK