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GuruFocus has detected 4 Warning Signs with IBI Group Inc $TSX:IBG.
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IBI Group Inc (TSX:IBG)
Beneish M-Score
-2.54 (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.

IBI Group Inc has a M-score of -2.54 suggests that the company is not a manipulator.

TSX:IBG' s Beneish M-Score Range Over the Past 10 Years
Min: -7.05   Max: -1.93
Current: -2.54

-7.05
-1.93

During the past 13 years, the highest Beneish M-Score of IBI Group Inc was -1.93. The lowest was -7.05. And the median was -2.37.


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 IBI Group 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 * 0.8974+0.528 * 1+0.404 * 1.2256+0.892 * 1.0827+0.115 * 0.9651
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9901+4.679 * -0.0382-0.327 * 0.847
=-2.54

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was C$108.6 Mil.
Revenue was 86.841 + 88.211 + 90.443 + 88.645 = C$354.1 Mil.
Gross Profit was 86.841 + 88.211 + 90.443 + 88.645 = C$354.1 Mil.
Total Current Assets was C$217.0 Mil.
Total Assets was C$261.8 Mil.
Property, Plant and Equipment(Net PPE) was C$15.8 Mil.
Depreciation, Depletion and Amortization(DDA) was C$5.3 Mil.
Selling, General & Admin. Expense(SGA) was C$271.6 Mil.
Total Current Liabilities was C$108.9 Mil.
Long-Term Debt was C$117.1 Mil.
Net Income was 6.09 + -3.777 + 3.567 + -3.066 = C$2.8 Mil.
Non Operating Income was -16.783 + -0.452 + -0.367 + -0.441 = C$-18.0 Mil.
Cash Flow from Operations was 17.249 + 13.895 + -6.099 + 5.807 = C$30.9 Mil.
Accounts Receivable was C$111.8 Mil.
Revenue was 84.913 + 83.819 + 80.879 + 77.481 = C$327.1 Mil.
Gross Profit was 84.913 + 83.819 + 80.879 + 77.481 = C$327.1 Mil.
Total Current Assets was C$217.2 Mil.
Total Assets was C$255.2 Mil.
Property, Plant and Equipment(Net PPE) was C$14.9 Mil.
Depreciation, Depletion and Amortization(DDA) was C$4.8 Mil.
Selling, General & Admin. Expense(SGA) was C$253.4 Mil.
Total Current Liabilities was C$103.1 Mil.
Long-Term Debt was C$157.1 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)
=(108.593 / 354.14) / (111.771 / 327.092)
=0.30663862 / 0.3417112
=0.8974

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)
=(327.092 / 327.092) / (354.14 / 354.14)
=1 / 1
=1

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 - (217.002 + 15.772) / 261.81) / (1 - (217.22 + 14.923) / 255.24)
=0.11090485 / 0.0904913
=1.2256

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
=354.14 / 327.092
=1.0827

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))
=(4.807 / (4.807 + 14.923)) / (5.326 / (5.326 + 15.772))
=0.24363913 / 0.25244099
=0.9651

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)
=(271.609 / 354.14) / (253.367 / 327.092)
=0.76695375 / 0.7746047
=0.9901

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)
=((117.127 + 108.942) / 261.81) / ((157.101 + 103.116) / 255.24)
=0.86348497 / 1.01949929
=0.847

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
=(2.814 - -18.043 - 30.852) / 261.81
=-0.0382

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.

IBI Group Inc has a M-score of -2.54 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.

IBI Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.15181.23570.96961.01660.88561.03790.96720.87660.9575
GMI 111111111
AQI 0.80911.05320.92520.99310.9590.96240.18841.3660.8494
SGI 1.09851.42481.1511.05721.14851.01630.76211.15891.0966
DEPI 1.32550.8040.85430.97831.05210.93441.10722.71980.8799
SGAI 0.98230.89570.98931.02060.99991.07451.15730.88060.9666
LVGI 0.86451.67171.08641.1171.01870.97011.91271.00580.9245
TATA 0.01430.03520.02760.00950.0398-0.008-0.7505-0.165-0.0527
M-score -2.18-1.92-2.32-2.42-2.28-2.49-6.88-2.86-2.72

IBI Group Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.80770.9470.95880.82320.99610.95750.84120.88810.87030.8974
GMI 1111111111
AQI 0.20541.3661.30171.35411.46940.84940.96681.10181.28161.2256
SGI 1.04951.07271.13261.19761.0741.09661.11891.1331.11031.0827
DEPI 0.58825.14185.365.73675.2070.88020.82860.80690.80290.9651
SGAI 0.87290.89280.88940.89020.97190.96660.95920.95430.97850.9901
LVGI 1.41691.00580.98430.97250.97530.92450.97360.94440.93490.847
TATA -0.48-0.1704-0.1705-0.1507-0.0916-0.0527-0.0795-0.0425-0.0758-0.0382
M-score -5.34-2.62-2.55-2.46-2.16-2.72-2.91-2.62-2.74-2.54
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