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GuruFocus has detected 1 Warning Sign with Insperity Inc $NSP.
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Insperity Inc (NYSE:NSP)
Beneish M-Score
-3.31 (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.

Insperity Inc has a M-score of -3.31 suggests that the company is not a manipulator.

NSP' s Beneish M-Score Range Over the Past 10 Years
Min: -4.04   Max: 95.15
Current: -3.31

-4.04
95.15

During the past 13 years, the highest Beneish M-Score of Insperity Inc was 95.15. The lowest was -4.04. And the median was -2.66.


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 Insperity 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 * 0.316+0.528 * 1.0383+0.404 * 1.1084+0.892 * 1.1227+0.115 * 1.369
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9401+4.679 * -0.0788-0.327 * 1.1753
=-3.31

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $3 Mil.
Revenue was 702.538 + 707.332 + 802.408 + 650.011 = $2,862 Mil.
Gross Profit was 117.796 + 113.259 + 150.016 + 97.045 = $478 Mil.
Total Current Assets was $549 Mil.
Total Assets was $795 Mil.
Property, Plant and Equipment(Net PPE) was $73 Mil.
Depreciation, Depletion and Amortization(DDA) was $17 Mil.
Selling, General & Admin. Expense(SGA) was $360 Mil.
Total Current Liabilities was $485 Mil.
Long-Term Debt was $104 Mil.
Net Income was 14.065 + 9.713 + 32.693 + 6.339 = $63 Mil.
Non Operating Income was 0 + 0 + 0 + -0.113 = $-0 Mil.
Cash Flow from Operations was -25.867 + -34.541 + 95.207 + 90.759 = $126 Mil.
Accounts Receivable was $8 Mil.
Revenue was 626.286 + 627.838 + 699.479 + 595.865 = $2,549 Mil.
Gross Profit was 106.743 + 104.219 + 129.86 + 101.359 = $442 Mil.
Total Current Assets was $568 Mil.
Total Assets was $780 Mil.
Property, Plant and Equipment(Net PPE) was $58 Mil.
Depreciation, Depletion and Amortization(DDA) was $20 Mil.
Selling, General & Admin. Expense(SGA) was $341 Mil.
Total Current Liabilities was $492 Mil.
Long-Term Debt was $0 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)
=(2.918 / 2862.289) / (8.224 / 2549.468)
=0.00101946 / 0.00322577
=0.316

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)
=(442.181 / 2549.468) / (478.116 / 2862.289)
=0.1734405 / 0.16703974
=1.0383

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 - (548.664 + 72.737) / 794.886) / (1 - (568.464 + 58.023) / 780.093)
=0.21825142 / 0.19690729
=1.1084

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
=2862.289 / 2549.468
=1.1227

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))
=(19.922 / (19.922 + 58.023)) / (16.697 / (16.697 + 72.737))
=0.25559048 / 0.18669633
=1.369

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)
=(360.194 / 2862.289) / (341.255 / 2549.468)
=0.12584124 / 0.13385342
=0.9401

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)
=((104.4 + 484.865) / 794.886) / ((0 + 492.064) / 780.093)
=0.74132014 / 0.63077607
=1.1753

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
=(62.81 - -0.113 - 125.558) / 794.886
=-0.0788

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.

Insperity Inc has a M-score of -3.31 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 local exchange's currency.

Insperity Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.04970.92750.88551.02231.11430.048322.08060.03751.54190.5799
GMI 0.99061.04430.97751.14431.00350.97521.00541.01581.01781.0184
AQI 0.78671.06261.02151.0590.97171.04311.03071.07241.22181.2607
SGI 1.1881.12991.09840.95861.04031.14911.09241.04511.04511.1043
DEPI 0.97220.91751.18190.87451.03121.1680.86490.830.96890.8752
SGAI 0.97940.97891.0530.96850.970.98550.95821.02351.01390.938
LVGI 0.91191.10221.00770.88541.06311.03811.04420.98071.09950.992
TATA -0.0751-0.0484-0.11670.0273-0.0854-0.0504-0.06740-0.1435-0.0326
M-score -2.68-2.65-3.04-2.24-2.76-3.4416.67-3.30-2.55-2.81

Insperity Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.20881.07581.54190.01591.79040.03060.57990.57220.52980.316
GMI 1.06671.05081.01780.97110.96340.97561.01841.04371.04781.0383
AQI 1.0771.00061.22181.19791.17191.24821.26071.16051.03881.1084
SGI 1.04321.03931.04511.06091.08041.09941.10431.11831.12181.1227
DEPI 0.88480.92240.96890.75660.77240.79780.87521.24141.3011.369
SGAI 0.9951.01651.01391.00860.98960.95790.9380.91120.92170.9401
LVGI 1.01191.07161.09951.06481.0981.08150.9921.24751.24181.1753
TATA 0.0005-0.0551-0.1435-0.0746-0.0824-0.0972-0.0326-0.1588-0.1612-0.0788
M-score -2.20-2.64-2.55-3.67-2.07-3.69-2.81-3.46-3.55-3.31
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