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GuruFocus has detected 5 Warning Signs with Veeco Instruments Inc $VECO.
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Veeco Instruments Inc (NAS:VECO)
Beneish M-Score
-2.88 (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.

Veeco Instruments Inc has a M-score of -2.88 suggests that the company is not a manipulator.

VECO' s Beneish M-Score Range Over the Past 10 Years
Min: -4.1   Max: -0.52
Current: -2.88

-4.1
-0.52

During the past 13 years, the highest Beneish M-Score of Veeco Instruments Inc was -0.52. The lowest was -4.10. And the median was -2.79.


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 Veeco Instruments 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 * 1.6811+0.528 * 0.9297+0.404 * 0.8571+0.892 * 0.6969+0.115 * 0.9534
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2353+4.679 * -0.1297-0.327 * 1.0372
=-2.88

* 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 $58.0 Mil.
Revenue was 93.609 + 85.482 + 75.348 + 78.011 = $332.5 Mil.
Gross Profit was 36.007 + 33.455 + 31.439 + 31.956 = $132.9 Mil.
Total Current Assets was $501.5 Mil.
Total Assets was $758.5 Mil.
Property, Plant and Equipment(Net PPE) was $60.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $32.7 Mil.
Selling, General & Admin. Expense(SGA) was $77.6 Mil.
Total Current Liabilities was $143.5 Mil.
Long-Term Debt was $0.8 Mil.
Net Income was -4.998 + -69.598 + -32.082 + -15.533 = $-122.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 0.464 + 6.823 + -12.333 + -18.798 = $-23.8 Mil.
Accounts Receivable was $49.5 Mil.
Revenue was 106.544 + 140.744 + 131.41 + 98.341 = $477.0 Mil.
Gross Profit was 38.785 + 54.25 + 49.069 + 35.136 = $177.2 Mil.
Total Current Assets was $542.1 Mil.
Total Assets was $890.8 Mil.
Property, Plant and Equipment(Net PPE) was $79.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $39.9 Mil.
Selling, General & Admin. Expense(SGA) was $90.2 Mil.
Total Current Liabilities was $162.2 Mil.
Long-Term Debt was $1.2 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)
=(58.02 / 332.45) / (49.524 / 477.039)
=0.17452248 / 0.10381541
=1.6811

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)
=(177.24 / 477.039) / (132.857 / 332.45)
=0.37154195 / 0.39963002
=0.9297

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 - (501.508 + 60.646) / 758.532) / (1 - (542.135 + 79.59) / 890.789)
=0.25889218 / 0.30205133
=0.8571

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
=332.45 / 477.039
=0.6969

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))
=(39.85 / (39.85 + 79.59)) / (32.65 / (32.65 + 60.646))
=0.33364032 / 0.34996141
=0.9534

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)
=(77.642 / 332.45) / (90.187 / 477.039)
=0.23354489 / 0.18905582
=1.2353

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)
=((0.826 + 143.509) / 758.532) / ((1.193 + 162.231) / 890.789)
=0.19028202 / 0.18345983
=1.0372

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
=(-122.211 - 0 - -23.844) / 758.532
=-0.1297

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.

Veeco Instruments Inc has a M-score of -2.88 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.

Veeco Instruments Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.95180.7211.77520.67610.60031.26120.58662.12970.67881.6811
GMI 1.12470.98131.01250.81570.99671.1621.3410.90560.9240.9297
AQI 1.05230.75260.75330.42061.40810.98892.56491.22730.95150.8571
SGI 0.91261.10020.63783.29621.05180.5270.64291.18421.21420.6969
DEPI 1.05890.97781.18471.16521.55940.92120.82560.72030.71280.9534
SGAI 1.07060.92761.04970.42591.03661.45821.81880.88660.82751.2353
LVGI 0.91980.97420.86560.84580.5410.67271.12371.33291.00341.0372
TATA -0.1082-0.2868-0.12320.14590.017-0.0865-0.0453-0.1173-0.0536-0.1297
M-score -3.00-4.08-2.70-0.21-2.35-2.97-2.78-1.90-2.90-2.88

Veeco Instruments Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.69022.12971.14221.16970.55340.67880.76490.54691.51131.6811
GMI 1.0810.90560.93150.86960.87730.9240.89290.9070.92760.9297
AQI 2.1191.22731.19981.15491.31350.95151.00551.0890.87070.8571
SGI 0.96481.18421.10971.2181.37321.21421.14070.91750.71350.6969
DEPI 0.62820.72030.70340.69270.71870.71280.84060.84050.84180.9534
SGAI 1.22410.88660.93690.85610.74380.82750.83970.96541.18631.2353
LVGI 1.34311.33291.73611.70881.22051.00340.87540.72651.07961.0372
TATA -0.0226-0.1173-0.1804-0.1752-0.1629-0.0536-0.0245-0.0303-0.1263-0.1297
M-score -1.68-1.90-3.31-3.20-3.32-2.90-2.69-3.05-3.02-2.88
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