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Quality Systems Inc (NAS:QSII)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

QSII' s 10-Year Beneish M-Score Range
Min: -3.75   Max: -1.16
Current: -3.06

-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 * 0.8189+0.528 * 0.9034+0.404 * 1.0011+0.892 * 1.0915+0.115 * 1.0084
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9755+4.679 * -0.089-0.327 * 1.1167
=-3.06

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 6.362 + 10.743 + 6.676 + 4.75 = $28.5 Mil.
Non Operating Income was -0.05 + -0.045 + 0 + -0.026 = $-0.1 Mil.
Cash Flow from Operations was 3.707 + 24.052 + 15.965 + 24.176 = $67.9 Mil.
Accounts Receivable was $111.8 Mil.
Revenue was 117.894 + 115.203 + 108.854 + 111.081 = $453.0 Mil.
Gross Profit was 61.704 + 61.849 + 37.799 + 63.399 = $224.8 Mil.
Total Current Assets was $259.2 Mil.
Total Assets was $441.8 Mil.
Property, Plant and Equipment(Net PPE) was $22.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.9 Mil.
Selling, General & Admin. Expense(SGA) was $150.8 Mil.
Total Current Liabilities was $124.7 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)
=(99.974 / 494.495) / (111.842 / 453.032)
=0.20217394 / 0.24687439
=0.8189

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)
=(72.547 / 453.032) / (66.187 / 494.495)
=0.49610403 / 0.54913396
=0.9034

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 - (259.28 + 22.055) / 440.889) / (1 - (259.162 + 22.915) / 441.781)
=0.36189154 / 0.36150038
=1.0011

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
=494.495 / 453.032
=1.0915

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))
=(29.874 / (29.874 + 22.915)) / (28.206 / (28.206 + 22.055))
=0.56591335 / 0.56119059
=1.0084

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)
=(160.613 / 494.495) / (150.848 / 453.032)
=0.32480207 / 0.33297427
=0.9755

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 + 139.018) / 440.889) / ((0 + 124.742) / 441.781)
=0.31531292 / 0.28236162
=1.1167

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
=(28.531 - -0.121 - 67.9) / 440.889
=-0.089

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 -3.06 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

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.99841.08661.00930.89341.00381.07410.85730.950.79070.8622
GMI 0.94990.98411.0181.04221.02850.97030.98621.10251.16450.9268
AQI 1.0591.00582.1071.33541.12120.84091.12821.1211.23071.0078
SGI 1.34091.31751.18671.31641.18861.21091.21641.07070.96621.1025
DEPI 1.0350.99690.8791.00550.99981.06811.0720.9560.94090.954
SGAI 1.07020.96780.990.991.0541.02870.9781.07541.0410.9615
LVGI 1.1210.98210.99690.880.9931.1050.81460.97540.98121.1971
TATA -0.07740.0024-0.0238-0.0096-0.0229-0.0232-0.0052-0.057-0.195-0.1202
M-score -2.59-2.10-1.97-2.14-2.36-2.44-2.33-2.64-3.44-3.18

Quality Systems Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.950.89930.93930.86620.79070.80210.73790.77460.86220.8189
GMI 1.10251.08871.07571.17141.16451.17041.17710.95270.92680.9034
AQI 1.1211.0511.39691.17521.23071.26930.90081.00591.00781.0011
SGI 1.07071.00840.97860.96250.96621.00351.0361.08231.10251.0915
DEPI 0.9560.92310.99560.98110.94090.93810.90960.92470.9541.0084
SGAI 1.07541.0691.0631.07211.0411.02420.98780.96570.96150.9755
LVGI 0.97540.94490.99351.20350.98121.00731.11231.09221.19711.1167
TATA -0.057-0.0886-0.1003-0.1969-0.195-0.1881-0.2293-0.158-0.1202-0.089
M-score -2.64-2.91-2.83-3.48-3.44-3.35-3.75-3.41-3.18-3.06
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