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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.
During the past 13 years, the highest Beneish M-Score of Insight Enterprises Inc was 64.29. The lowest was -4.79. And the median was -2.31.
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 Insight Enterprises 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 * 1.0112||+||0.528 * 1.0141||+||0.404 * 0.8602||+||0.892 * 1.0332||+||0.115 * 0.8783|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9817||+||4.679 * 0.0135||-||0.327 * 0.9975|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,037 Mil.|
Revenue was 1237.668 + 1417.897 + 1214.53 + 1395.158 = $5,265 Mil.
Gross Profit was 171.82 + 194.599 + 163.745 + 181.155 = $711 Mil.
Total Current Assets was $1,417 Mil.
Total Assets was $1,656 Mil.
Property, Plant and Equipment(Net PPE) was $111 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $574 Mil.
Total Current Liabilities was $842 Mil.
Long-Term Debt was $54 Mil.
Net Income was 17.402 + 27.249 + 11.55 + 20.407 = $77 Mil.
Non Operating Income was -0.607 + -0.904 + -0.745 + -0.777 = $-3 Mil.
Cash Flow from Operations was -55.919 + 37.682 + 66.033 + 9.49 = $57 Mil.
|Accounts Receivable was $993 Mil.
Revenue was 1151.02 + 1416.547 + 1181.622 + 1346.675 = $5,096 Mil.
Gross Profit was 168.668 + 190.927 + 158.137 + 180.393 = $698 Mil.
Total Current Assets was $1,339 Mil.
Total Assets was $1,620 Mil.
Property, Plant and Equipment(Net PPE) was $135 Mil.
Depreciation, Depletion and Amortization(DDA) was $42 Mil.
Selling, General & Admin. Expense(SGA) was $566 Mil.
Total Current Liabilities was $790 Mil.
Long-Term Debt was $89 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1037.173 / 5265.253)||/||(992.733 / 5095.864)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(194.599 / 5095.864)||/||(171.82 / 5265.253)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1416.878 + 110.965) / 1655.608)||/||(1 - (1339.088 + 135.306) / 1619.696)|
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.
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))|
|=||(41.879 / (41.879 + 135.306))||/||(40.855 / (40.855 + 110.965))|
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)|
|=||(574.172 / 5265.253)||/||(566.063 / 5095.864)|
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)|
|=||((53.591 + 842.055) / 1655.608)||/||((88.503 + 789.929) / 1619.696)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(76.608 - -3.033||-||57.286)||/||1655.608|
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.
Insight Enterprises Inc has a M-score of -2.44 suggests that the company will not be a manipulator.
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
Insight Enterprises Inc Annual Data
Insight Enterprises Inc Quarterly Data