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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 11 years, the highest Beneish M-Score of IBI Group Inc was -1.60. The lowest was -6.94. And the median was -2.38.
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 * 0.9961||+||0.528 * 1||+||0.404 * 1.4694||+||0.892 * 1.074||+||0.115 * 5.207|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9719||+||4.679 * -0.0936||-||0.327 * 0.9753|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was C$109.7 Mil.|
Revenue was 83.819 + 80.879 + 77.481 + 75.03 = C$317.2 Mil.
Gross Profit was 83.819 + 80.879 + 77.481 + 75.03 = C$317.2 Mil.
Total Current Assets was C$215.0 Mil.
Total Assets was C$255.4 Mil.
Property, Plant and Equipment(Net PPE) was C$14.3 Mil.
Depreciation, Depletion and Amortization(DDA) was C$3.9 Mil.
Selling, General & Admin. Expense(SGA) was C$247.4 Mil.
Total Current Liabilities was C$168.3 Mil.
Long-Term Debt was C$105.6 Mil.
Net Income was 3.755 + 1.243 + 1.97 + -5.423 = C$1.5 Mil.
Non Operating Income was -2.109 + -0.409 + -0.449 + -0.423 = C$-3.4 Mil.
Cash Flow from Operations was 11.626 + 0.481 + 4.472 + 12.257 = C$28.8 Mil.
|Accounts Receivable was C$102.5 Mil.
Revenue was 73.605 + 76.182 + 73.456 + 72.109 = C$295.4 Mil.
Gross Profit was 73.605 + 76.182 + 73.456 + 72.109 = C$295.4 Mil.
Total Current Assets was C$229.8 Mil.
Total Assets was C$255.9 Mil.
Property, Plant and Equipment(Net PPE) was C$8.3 Mil.
Depreciation, Depletion and Amortization(DDA) was C$-74.3 Mil.
Selling, General & Admin. Expense(SGA) was C$237.0 Mil.
Total Current Liabilities was C$98.4 Mil.
Long-Term Debt was C$183.1 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)|
|=||(109.693 / 317.209)||/||(102.539 / 295.352)|
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)|
|=||(80.879 / 295.352)||/||(83.819 / 317.209)|
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 - (215.005 + 14.259) / 255.392)||/||(1 - (229.765 + 8.311) / 255.892)|
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))|
|=||(-74.299 / (-74.299 + 8.311))||/||(3.934 / (3.934 + 14.259))|
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)|
|=||(247.396 / 317.209)||/||(237.019 / 295.352)|
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)|
|=||((105.629 + 168.343) / 255.392)||/||((183.063 + 98.397) / 255.892)|
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|
|=||(1.545 - -3.39||-||28.836)||/||255.392|
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 -2.17 signals that the company is likely to 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