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Quality Systems Inc (NAS:QSII)
Beneish M-Score
-2.93 (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.

Quality Systems Inc has a M-score of -2.93 suggests that the company is not a manipulator.

QSII' s Beneish M-Score Range Over the Past 10 Years
Min: -3.75   Max: -1.16
Current: -2.93

-3.75
-1.16

During the past 13 years, the highest Beneish M-Score of Quality Systems Inc was -1.16. The lowest was -3.75. And the median was -2.51.


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 Quality Systems 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 * 0.8214+0.528 * 1.0165+0.404 * 1.7251+0.892 * 0.996+0.115 * 1.0032
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9855+4.679 * -0.1013-0.327 * 1.3405
=-2.93

* 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 $81.8 Mil.
Revenue was 122.205 + 127.912 + 117.032 + 125.369 = $492.5 Mil.
Gross Profit was 65.39 + 68.657 + 63.247 + 68.771 = $266.1 Mil.
Total Current Assets was $163.1 Mil.
Total Assets was $505.1 Mil.
Property, Plant and Equipment(Net PPE) was $26.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.9 Mil.
Selling, General & Admin. Expense(SGA) was $157.6 Mil.
Total Current Liabilities was $125.5 Mil.
Long-Term Debt was $88.0 Mil.
Net Income was -0.647 + -16.322 + 7.302 + 8.315 = $-1.4 Mil.
Non Operating Income was -0.087 + -0.019 + -0.043 + -0.054 = $-0.2 Mil.
Cash Flow from Operations was 12.933 + 13.504 + 13.406 + 10.179 = $50.0 Mil.
Accounts Receivable was $100.0 Mil.
Revenue was 122.164 + 128.388 + 123.424 + 120.519 = $494.5 Mil.
Gross Profit was 66.187 + 72.547 + 69.064 + 63.746 = $271.5 Mil.
Total Current Assets was $259.3 Mil.
Total Assets was $440.9 Mil.
Property, Plant and Equipment(Net PPE) was $22.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.2 Mil.
Selling, General & Admin. Expense(SGA) was $160.6 Mil.
Total Current Liabilities was $139.0 Mil.
Long-Term Debt was $0.0 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)
=(81.795 / 492.518) / (99.974 / 494.495)
=0.16607515 / 0.20217394
=0.8214

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)
=(271.544 / 494.495) / (266.065 / 492.518)
=0.54913396 / 0.54021376
=1.0165

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 - (163.067 + 26.683) / 505.074) / (1 - (259.28 + 22.055) / 440.889)
=0.62431248 / 0.36189154
=1.7251

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
=492.518 / 494.495
=0.996

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))
=(28.206 / (28.206 + 22.055)) / (33.878 / (33.878 + 26.683))
=0.56119059 / 0.55940292
=1.0032

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)
=(157.644 / 492.518) / (160.613 / 494.495)
=0.32007764 / 0.32480207
=0.9855

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)
=((88 + 125.49) / 505.074) / ((0 + 139.018) / 440.889)
=0.42269054 / 0.31531292
=1.3405

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
=(-1.352 - -0.203 - 50.022) / 505.074
=-0.1013

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.

Quality Systems Inc has a M-score of -2.93 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.

Quality Systems Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.08661.00930.89341.00381.07410.85730.950.79070.86220.8693
GMI 0.98411.0181.04221.02850.97030.98621.10251.16450.92681.0053
AQI 1.00582.1071.33541.12120.84091.12821.1211.23071.15981.5158
SGI 1.31751.18671.31641.18861.21091.21641.07070.96621.10251.0046
DEPI 0.99690.8791.00550.99981.06811.0720.9560.94090.9541.0913
SGAI 0.96780.990.991.0541.02870.9781.07541.0410.96150.9832
LVGI 0.98210.99690.880.9931.1050.81460.97540.98121.19711.3598
TATA 0.0243-0.0238-0.0096-0.0229-0.0232-0.0052-0.057-0.195-0.1202-0.0659
M-score -2.00-1.97-2.14-2.36-2.44-2.33-2.64-3.44-3.11-2.80

Quality Systems Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.79070.80210.73790.77460.86220.81890.85440.84630.86930.8214
GMI 1.16451.17041.17710.95270.92680.90340.87880.97841.00531.0165
AQI 1.23071.26930.90081.00591.15981.00111.00511.02861.51581.7251
SGI 0.96621.00351.0361.08231.10251.09151.07971.03341.00460.996
DEPI 0.94090.93810.90960.92470.9541.00841.04281.08351.09131.0032
SGAI 1.0411.02420.98780.96570.96150.97550.97750.97810.98320.9855
LVGI 0.98121.00731.11231.09221.19711.11670.98470.95651.35981.3405
TATA -0.195-0.1881-0.2293-0.158-0.1202-0.089-0.0497-0.0425-0.0659-0.1013
M-score -3.44-3.35-3.75-3.41-3.11-3.06-2.82-2.76-2.80-2.93
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