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Quality Systems Inc (NAS:QSII)
Beneish M-Score
-3.28 (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 -3.28 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: -3.28

-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 -2.52.


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 * 0.805+0.528 * 1.0198+0.404 * 1.7883+0.892 * 0.9899+0.115 * 0.919
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0337+4.679 * -0.1854-0.327 * 1.1737
=-3.28

* 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 $78.4 Mil.
Revenue was 127.166 + 122.205 + 127.912 + 117.032 = $494.3 Mil.
Gross Profit was 71.169 + 65.39 + 68.657 + 63.247 = $268.5 Mil.
Total Current Assets was $143.3 Mil.
Total Assets was $478.9 Mil.
Property, Plant and Equipment(Net PPE) was $26.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $38.1 Mil.
Selling, General & Admin. Expense(SGA) was $163.0 Mil.
Total Current Liabilities was $123.8 Mil.
Long-Term Debt was $48.0 Mil.
Net Income was 3.987 + -0.647 + -16.322 + 7.302 = $-5.7 Mil.
Non Operating Income was -0.055 + -0.087 + -0.019 + -0.043 = $-0.2 Mil.
Cash Flow from Operations was 43.452 + 12.933 + 13.504 + 13.406 = $83.3 Mil.
Accounts Receivable was $98.4 Mil.
Revenue was 125.369 + 122.164 + 128.388 + 123.424 = $499.3 Mil.
Gross Profit was 68.771 + 66.187 + 72.547 + 69.064 = $276.6 Mil.
Total Current Assets was $255.9 Mil.
Total Assets was $436.1 Mil.
Property, Plant and Equipment(Net PPE) was $22.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.1 Mil.
Selling, General & Admin. Expense(SGA) was $159.3 Mil.
Total Current Liabilities was $133.3 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)
=(78.406 / 494.315) / (98.393 / 499.345)
=0.15861546 / 0.19704413
=0.805

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)
=(276.569 / 499.345) / (268.463 / 494.315)
=0.55386356 / 0.54310106
=1.0198

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 - (143.258 + 25.985) / 478.888) / (1 - (255.907 + 22.537) / 436.142)
=0.64659169 / 0.3615749
=1.7883

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
=494.315 / 499.345
=0.9899

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))
=(27.119 / (27.119 + 22.537)) / (38.063 / (38.063 + 25.985))
=0.54613743 / 0.59428866
=0.919

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)
=(163.038 / 494.315) / (159.328 / 499.345)
=0.32982612 / 0.31907399
=1.0337

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)
=((48 + 123.844) / 478.888) / ((0 + 133.345) / 436.142)
=0.35883965 / 0.30573758
=1.1737

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
=(-5.68 - -0.204 - 83.295) / 478.888
=-0.1854

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 -3.28 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.

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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.80210.73790.77460.86220.81890.85440.84630.86930.82140.805
GMI 1.17041.17710.95270.92680.90340.87880.97841.00531.01651.0198
AQI 1.26930.90081.00591.15981.00111.00511.02861.51581.72511.7883
SGI 1.00351.0361.08231.10251.09151.07971.03341.00460.9960.9899
DEPI 0.93810.90960.92470.9541.00841.04281.08351.09131.00320.919
SGAI 1.02420.98780.96570.96150.97550.97750.97810.98320.98551.0337
LVGI 1.00731.11231.09221.19711.11670.98470.95651.35981.34051.1737
TATA -0.1881-0.2293-0.158-0.1202-0.089-0.0497-0.0425-0.0659-0.1013-0.1854
M-score -3.35-3.75-3.41-3.11-3.06-2.82-2.76-2.80-2.93-3.28
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