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Quality Systems Inc (NAS:QSII)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

QSII' s Beneish M-Score Range Over the Past 10 Years
Min: -3.44   Max: -1.69
Current: -2.8

-3.44
-1.69

During the past 13 years, the highest Beneish M-Score of Quality Systems Inc was -1.69. The lowest was -3.44. And the median was -2.53.


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 * 0.8693+0.528 * 1.0053+0.404 * 1.5158+0.892 * 1.0046+0.115 * 1.0913
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9832+4.679 * -0.0659-0.327 * 1.3598
=-2.80

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $94.0 Mil.
Revenue was 127.912 + 117.032 + 125.369 + 122.164 = $492.5 Mil.
Gross Profit was 68.657 + 63.247 + 68.771 + 66.187 = $266.9 Mil.
Total Current Assets was $184.0 Mil.
Total Assets was $530.8 Mil.
Property, Plant and Equipment(Net PPE) was $25.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.7 Mil.
Selling, General & Admin. Expense(SGA) was $156.2 Mil.
Total Current Liabilities was $138.1 Mil.
Long-Term Debt was $105.0 Mil.
Net Income was -16.322 + 7.302 + 8.315 + 6.362 = $5.7 Mil.
Non Operating Income was -0.019 + -0.043 + -0.054 + -0.05 = $-0.2 Mil.
Cash Flow from Operations was 13.504 + 13.406 + 10.179 + 3.707 = $40.8 Mil.
Accounts Receivable was $107.7 Mil.
Revenue was 128.388 + 123.424 + 120.519 + 117.894 = $490.2 Mil.
Gross Profit was 72.547 + 69.064 + 63.746 + 61.704 = $267.1 Mil.
Total Current Assets was $256.0 Mil.
Total Assets was $460.5 Mil.
Property, Plant and Equipment(Net PPE) was $20.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.3 Mil.
Selling, General & Admin. Expense(SGA) was $158.2 Mil.
Total Current Liabilities was $155.1 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)
=(94.024 / 492.477) / (107.669 / 490.225)
=0.19092059 / 0.2196318
=0.8693

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)
=(63.247 / 490.225) / (68.657 / 492.477)
=0.5447723 / 0.54187708
=1.0053

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 - (183.991 + 25.79) / 530.79) / (1 - (255.977 + 20.807) / 460.521)
=0.6047759 / 0.39897638
=1.5158

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
=492.477 / 490.225
=1.0046

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))
=(29.267 / (29.267 + 20.807)) / (29.739 / (29.739 + 25.79))
=0.58447498 / 0.535558
=1.0913

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)
=(156.234 / 492.477) / (158.172 / 490.225)
=0.31724121 / 0.32265184
=0.9832

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)
=((105 + 138.06) / 530.79) / ((0 + 155.084) / 460.521)
=0.45792121 / 0.33675772
=1.3598

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
=(5.657 - -0.166 - 40.796) / 530.79
=-0.0659

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 -2.80 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 0.96780.991.00471.03851.02870.9781.07541.0410.96150.9832
LVGI 0.98210.99690.880.9931.1050.81460.97540.98121.19711.3598
TATA 0.0243-0.0238-0.0096-0.0229-0.0225-0.0022-0.057-0.1952-0.1202-0.0659
M-score -2.00-1.97-2.14-2.36-2.44-2.31-2.64-3.44-3.11-2.80

Quality Systems Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.86620.79070.80210.73790.77460.86220.81890.85440.84630.8693
GMI 1.17141.16451.17041.17710.95270.92680.90340.87880.97841.0053
AQI 1.17521.23071.26930.90081.00591.15981.00111.00511.02861.5158
SGI 0.96250.96621.00351.0361.08231.10251.09151.07971.03341.0046
DEPI 0.98110.94090.93810.90960.92470.9541.00841.04281.08351.0913
SGAI 1.07211.0411.02420.98780.96570.96150.97550.97750.97810.9832
LVGI 1.20350.98121.00731.11231.09221.19711.11670.98470.95651.3598
TATA -0.1969-0.195-0.1881-0.2293-0.158-0.1202-0.089-0.0497-0.0425-0.0659
M-score -3.48-3.44-3.35-3.75-3.41-3.11-3.06-2.82-2.76-2.80
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