Switch to:
Quality Systems Inc (NAS:QSII)
Beneish M-Score
-3.41 (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 -3.41 suggests that the company is not a manipulator.

QSII' s 10-Year Beneish M-Score Range
Min: -3.75   Max: -1.16
Current: -3.41

-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 -2.49.


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 * 0.7746+0.528 * 0.9527+0.404 * 1.0059+0.892 * 1.0823+0.115 * 0.9247
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9657+4.679 * -0.1582-0.327 * 1.0922
=-3.41

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $105.9 Mil.
Revenue was 123.424 + 120.519 + 117.894 + 115.203 = $477.0 Mil.
Gross Profit was 69.064 + 63.746 + 61.704 + 61.849 = $256.4 Mil.
Total Current Assets was $261.0 Mil.
Total Assets was $439.3 Mil.
Property, Plant and Equipment(Net PPE) was $21.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.5 Mil.
Selling, General & Admin. Expense(SGA) was $155.6 Mil.
Total Current Liabilities was $138.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 6.676 + 4.75 + 5.163 + 5.201 = $21.8 Mil.
Non Operating Income was 0 + -0.026 + 0.009 + 0.035 = $0.0 Mil.
Cash Flow from Operations was 15.965 + 24.176 + 18.565 + 32.569 = $91.3 Mil.
Accounts Receivable was $126.3 Mil.
Revenue was 108.854 + 111.081 + 109.529 + 111.295 = $440.8 Mil.
Gross Profit was 37.799 + 63.399 + 61.457 + 62.998 = $225.7 Mil.
Total Current Assets was $264.8 Mil.
Total Assets was $447.8 Mil.
Property, Plant and Equipment(Net PPE) was $24.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.7 Mil.
Selling, General & Admin. Expense(SGA) was $148.8 Mil.
Total Current Liabilities was $129.6 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)
=(105.879 / 477.04) / (126.298 / 440.759)
=0.22194994 / 0.28654662
=0.7746

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)
=(63.746 / 440.759) / (69.064 / 477.04)
=0.51196459 / 0.53740357
=0.9527

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 - (260.998 + 21.636) / 439.251) / (1 - (264.793 + 24.266) / 447.777)
=0.35655468 / 0.35445769
=1.0059

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
=477.04 / 440.759
=1.0823

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))
=(27.715 / (27.715 + 24.266)) / (29.463 / (29.463 + 21.636))
=0.53317558 / 0.57658663
=0.9247

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)
=(155.569 / 477.04) / (148.846 / 440.759)
=0.32611311 / 0.33770382
=0.9657

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 + 138.909) / 439.251) / ((0 + 129.649) / 447.777)
=0.3162406 / 0.28953921
=1.0922

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
=(21.79 - 0.018 - 91.275) / 439.251
=-0.1582

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 -3.41 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 1.30810.99841.08661.00930.89341.00381.07410.85730.950.7692
GMI 0.94150.94990.98411.0181.04221.02850.97030.98621.10251.1645
AQI 0.86991.0591.00582.1071.33541.12120.84091.12821.1211.3014
SGI 1.25411.34091.31751.18671.31641.18861.21091.21641.07070.9662
DEPI 1.02411.0350.99690.8791.00550.99981.06811.0720.9560.9409
SGAI 1.0141.07020.96780.990.991.0541.02870.9781.07541.041
LVGI 1.25811.1210.98210.99690.880.9931.1050.81460.97540.9709
TATA -0.0643-0.07740.0024-0.0238-0.0096-0.0229-0.0232-0.0052-0.057-0.198
M-score -2.44-2.59-2.10-1.97-2.14-2.36-2.44-2.33-2.64-3.44

Quality Systems Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.87940.86660.950.89930.93930.86620.76920.80210.73790.7746
GMI 1.0651.09911.10251.08871.07571.17141.16451.17041.17710.9527
AQI 1.24591.25261.1211.0511.39691.17521.30141.26930.90081.0059
SGI 1.14891.09571.07071.00840.97860.96250.96621.00351.0361.0823
DEPI 1.0070.97180.9560.92310.99560.98110.94090.93810.90960.9247
SGAI 1.03891.06221.07541.0691.0631.07211.0411.02420.98780.9657
LVGI 0.91530.76910.97540.94490.99351.20350.97091.00731.11231.0922
TATA -0.00690.0015-0.057-0.0886-0.1003-0.1969-0.198-0.1883-0.2295-0.1582
M-score -2.33-2.29-2.64-2.91-2.83-3.48-3.44-3.35-3.75-3.41
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK