Switch to:
Quality Systems Inc (NAS:QSII)
Beneish M-Score
-3.18 (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 -3.18 suggests that the company is not a manipulator.

QSII' s 10-Year Beneish M-Score Range
Min: -3.44   Max: -1.69
Current: -3.18

-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 -2.50.


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 * 0.8622+0.528 * 0.9268+0.404 * 1.0078+0.892 * 1.1025+0.115 * 0.954
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9615+4.679 * -0.1202-0.327 * 1.1971
=-3.18

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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 $280.1 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.
Net Income was 10.743 + 6.676 + 4.75 + 5.163 = $27.3 Mil.
Non Operating Income was -0.045 + 0 + -0.026 + 0.009 = $-0.1 Mil.
Cash Flow from Operations was 24.052 + 15.965 + 24.176 + 18.565 = $82.8 Mil.
Accounts Receivable was $113.3 Mil.
Revenue was 115.203 + 108.854 + 111.081 + 109.529 = $444.7 Mil.
Gross Profit was 61.849 + 37.799 + 63.399 + 61.457 = $224.5 Mil.
Total Current Assets was $273.3 Mil.
Total Assets was $451.4 Mil.
Property, Plant and Equipment(Net PPE) was $22.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.7 Mil.
Selling, General & Admin. Expense(SGA) was $149.2 Mil.
Total Current Liabilities was $127.0 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)
=(107.669 / 490.225) / (113.268 / 444.667)
=0.2196318 / 0.25472545
=0.8622

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)
=(69.064 / 444.667) / (72.547 / 490.225)
=0.50488118 / 0.5447723
=0.9268

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 - (280.057 + 20.807) / 460.521) / (1 - (273.286 + 22.801) / 451.351)
=0.34668777 / 0.34399835
=1.0078

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
=490.225 / 444.667
=1.1025

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))
=(28.737 / (28.737 + 22.801)) / (29.267 / (29.267 + 20.807))
=0.55758858 / 0.58447498
=0.954

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)
=(158.172 / 490.225) / (149.214 / 444.667)
=0.32265184 / 0.33556347
=0.9615

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 + 155.084) / 460.521) / ((0 + 126.973) / 451.351)
=0.33675772 / 0.28131764
=1.1971

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
=(27.332 - -0.062 - 82.758) / 460.521
=-0.1202

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 -3.18 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.86660.950.89930.93930.86620.79070.80210.73790.77460.8622
GMI 1.09911.10251.08871.07571.17141.16451.17041.17710.95270.9268
AQI 1.25261.1211.0511.39691.17521.23071.26930.90081.00591.0078
SGI 1.09571.07071.00840.97860.96250.96621.00351.0361.08231.1025
DEPI 0.97180.9560.92310.99560.98110.94090.93810.90960.92470.954
SGAI 1.06221.07541.0691.0631.07211.0411.02420.98780.96570.9615
LVGI 0.76910.97540.94490.99351.20350.98121.00731.11231.09221.1971
TATA 0.0015-0.057-0.0886-0.1003-0.1969-0.195-0.1881-0.2293-0.158-0.1202
M-score -2.29-2.64-2.91-2.83-3.48-3.44-3.35-3.75-3.41-3.18
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)

GuruFocus Premium Plus Membership

FEEDBACK