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IRIDEX Corp (NAS:IRIX)
Beneish M-Score
-2.11 (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 -2.11 signals that the company is a manipulator.

IRIX' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 10000000
Current: -2.11

-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 -2.33.


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 * 1.1697+0.528 * 1.0869+0.404 * 1.2342+0.892 * 0.991+0.115 * 0.8769
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9994+4.679 * 0.0239-0.327 * 1.0417
=-2.11

* 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 $9.30 Mil.
Revenue was 11.931 + 12.113 + 9.815 + 9.033 = $42.89 Mil.
Gross Profit was 5.297 + 5.485 + 4.841 + 4.217 = $19.84 Mil.
Total Current Assets was $31.38 Mil.
Total Assets was $42.36 Mil.
Property, Plant and Equipment(Net PPE) was $1.06 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.54 Mil.
Selling, General & Admin. Expense(SGA) was $14.51 Mil.
Total Current Liabilities was $7.54 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.101 + 0.438 + 0.442 + -0.652 = $0.33 Mil.
Non Operating Income was -0.011 + -0.131 + 0.164 + -0.023 = $-0.00 Mil.
Cash Flow from Operations was 0.526 + -0.239 + -0.739 + -0.232 = $-0.68 Mil.
Accounts Receivable was $8.02 Mil.
Revenue was 10.796 + 11.778 + 10.118 + 10.589 = $43.28 Mil.
Gross Profit was 5.41 + 5.901 + 5.149 + 5.3 = $21.76 Mil.
Total Current Assets was $33.21 Mil.
Total Assets was $42.25 Mil.
Property, Plant and Equipment(Net PPE) was $1.02 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.43 Mil.
Selling, General & Admin. Expense(SGA) was $14.65 Mil.
Total Current Liabilities was $7.21 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)
=(9.297 / 42.892) / (8.02 / 43.281)
=0.21675371 / 0.18530071
=1.1697

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)
=(5.485 / 43.281) / (5.297 / 42.892)
=0.50276103 / 0.46255712
=1.0869

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 - (31.378 + 1.055) / 42.363) / (1 - (33.21 + 1.016) / 42.25)
=0.23440266 / 0.18991716
=1.2342

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
=42.892 / 43.281
=0.991

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))
=(0.432 / (0.432 + 1.016)) / (0.544 / (0.544 + 1.055))
=0.29834254 / 0.34021263
=0.8769

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)
=(14.511 / 42.892) / (14.651 / 43.281)
=0.33831484 / 0.33850881
=0.9994

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 + 7.535) / 42.363) / ((0 + 7.214) / 42.25)
=0.17786748 / 0.17074556
=1.0417

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
=(0.329 - -0.001 - -0.684) / 42.363
=0.0239

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 -2.11 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 0.94730.94821.0571.02480.99480.97190.96681.18571.01471.1415
GMI 0.93711.19771.07840.86440.98070.97381.01760.99410.97141.0463
AQI 1.1676.7050.29540.86471.6320.84680.65910.72735.66561.2149
SGI 0.96961.54670.87390.89051.01120.75891.02111.13041.11860.9753
DEPI 0.8440.4740.88331.22431.10281.05511.18880.98921.30451.1327
SGAI 1.53030.99990.7310.89040.99921.08031.07160.87930.99541.0442
LVGI 1.24562.98980.97830.79410.67890.88080.79430.99270.771.0556
TATA -0.1087-0.5198-0.2861-0.1772-0.0422-0.03850.06140.04350.14410.0254
M-score -3.22-2.77-4.08-3.40-2.31-2.95-2.26-2.080.29-2.15

IRIDEX Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.18570.97071.01431.16961.01471.09170.99181.02611.14151.1697
GMI 0.99410.98280.97610.97090.97140.97340.99461.00881.04631.0869
AQI 0.72730.7480.84320.90725.66565.60765.89616.15871.21491.2342
SGI 1.13041.14991.1641.12821.11861.09121.01660.99490.97530.991
DEPI 0.98921.10911.34091.30281.30451.51111.27471.1621.13270.8769
SGAI 0.87930.91140.95581.03780.99541.01751.04331.04351.04420.9994
LVGI 0.99270.97870.9020.98250.770.92760.89180.87921.05561.0417
TATA 0.0440.00370.0121-0.00260.17410.16510.16930.21210.02540.0239
M-score -2.08-2.43-2.26-2.240.430.390.350.67-2.15-2.11
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