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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.
During the past 12 years, the highest Beneish M-Score of IBI Group Inc was -1.65. The lowest was -6.94. And the median was -2.34.
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 * 0.8881||+||0.528 * 1||+||0.404 * 1.1018||+||0.892 * 1.133||+||0.115 * 0.8069|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9543||+||4.679 * -0.0899||-||0.327 * 0.9444|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was C$102.5 Mil.|
Revenue was 90.443 + 88.645 + 84.913 + 83.819 = C$347.8 Mil.
Gross Profit was 90.443 + 88.645 + 84.913 + 83.819 = C$347.8 Mil.
Total Current Assets was C$213.3 Mil.
Total Assets was C$257.9 Mil.
Property, Plant and Equipment(Net PPE) was C$14.5 Mil.
Depreciation, Depletion and Amortization(DDA) was C$5.2 Mil.
Selling, General & Admin. Expense(SGA) was C$266.1 Mil.
Total Current Liabilities was C$94.7 Mil.
Long-Term Debt was C$170.9 Mil.
Net Income was 3.567 + -3.066 + 0.413 + 3.755 = C$4.7 Mil.
Non Operating Income was -0.367 + -0.441 + 5.191 + -2.109 = C$2.3 Mil.
Cash Flow from Operations was -6.099 + 5.807 + 14.246 + 11.626 = C$25.6 Mil.
|Accounts Receivable was C$101.8 Mil.
Revenue was 80.879 + 77.481 + 75.03 + 73.605 = C$307.0 Mil.
Gross Profit was 80.879 + 77.481 + 75.03 + 73.605 = C$307.0 Mil.
Total Current Assets was C$208.8 Mil.
Total Assets was C$249.2 Mil.
Property, Plant and Equipment(Net PPE) was C$14.1 Mil.
Depreciation, Depletion and Amortization(DDA) was C$3.8 Mil.
Selling, General & Admin. Expense(SGA) was C$246.1 Mil.
Total Current Liabilities was C$167.7 Mil.
Long-Term Debt was C$104.1 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(102.454 / 347.82)||/||(101.827 / 306.995)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(306.995 / 306.995)||/||(347.82 / 347.82)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (213.286 + 14.543) / 257.857)||/||(1 - (208.755 + 14.092) / 249.185)|
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.
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))|
|=||(3.779 / (3.779 + 14.092))||/||(5.165 / (5.165 + 14.543))|
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)|
|=||(266.095 / 347.82)||/||(246.107 / 306.995)|
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)|
|=||((170.948 + 94.72) / 257.857)||/||((104.124 + 167.726) / 249.185)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(4.669 - 2.274||-||25.58)||/||257.857|
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 -2.84 suggests that the company will not be a manipulator.
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
IBI Group Inc Annual Data
IBI Group Inc Quarterly Data