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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
-3.04 (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 -3.02 suggests that the company is not a manipulator.

VECO' s Beneish M-Score Range Over the Past 10 Years
Min: -5.15   Max: 0.22
Current: -3.04

-5.15
0.22

During the past 13 years, the highest Beneish M-Score of Veeco Instruments Inc was 0.22. The lowest was -5.15. And the median was -2.62.


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 * 1.5113+0.528 * 0.9276+0.404 * 0.8707+0.892 * 0.7135+0.115 * 0.8418
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1863+4.679 * -0.1263-0.327 * 1.0796
=-3.02

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $50.5 Mil.
Revenue was 85.482 + 75.348 + 78.011 + 106.544 = $345.4 Mil.
Gross Profit was 33.455 + 31.439 + 31.956 + 38.785 = $135.6 Mil.
Total Current Assets was $508.4 Mil.
Total Assets was $765.1 Mil.
Property, Plant and Equipment(Net PPE) was $57.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.1 Mil.
Selling, General & Admin. Expense(SGA) was $79.3 Mil.
Total Current Liabilities was $147.8 Mil.
Long-Term Debt was $0.9 Mil.
Net Income was -69.598 + -32.082 + -15.533 + -9.787 = $-127.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 6.823 + -12.333 + -18.798 + -6.061 = $-30.4 Mil.
Accounts Receivable was $46.8 Mil.
Revenue was 140.744 + 131.41 + 98.341 + 113.569 = $484.1 Mil.
Gross Profit was 54.25 + 49.069 + 35.136 + 37.874 = $176.3 Mil.
Total Current Assets was $563.5 Mil.
Total Assets was $918.7 Mil.
Property, Plant and Equipment(Net PPE) was $80.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.7 Mil.
Selling, General & Admin. Expense(SGA) was $93.6 Mil.
Total Current Liabilities was $164.1 Mil.
Long-Term Debt was $1.3 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)
=(50.463 / 345.385) / (46.798 / 484.064)
=0.14610652 / 0.0966773
=1.5113

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)
=(176.329 / 484.064) / (135.635 / 345.385)
=0.36426795 / 0.39270669
=0.9276

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 - (508.36 + 57.557) / 765.068) / (1 - (563.513 + 80.521) / 918.689)
=0.26030497 / 0.29896407
=0.8707

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
=345.385 / 484.064
=0.7135

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))
=(37.69 / (37.69 + 80.521)) / (35.094 / (35.094 + 57.557))
=0.31883666 / 0.37877627
=0.8418

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)
=(79.265 / 345.385) / (93.642 / 484.064)
=0.22949752 / 0.19344963
=1.1863

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)
=((0.92 + 147.761) / 765.068) / ((1.281 + 164.092) / 918.689)
=0.19433697 / 0.18000977
=1.0796

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
=(-127 - 0 - -30.369) / 765.068
=-0.1263

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 -3.02 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.90250.95180.7211.77520.67610.60031.26120.58662.12970.6788
GMI 0.96431.12470.98131.01250.81570.99671.1621.3410.90560.924
AQI 0.8961.05230.75260.75330.42061.40810.98892.56491.22730.9515
SGI 1.07520.91261.10020.63783.29621.05180.5270.64291.18421.2142
DEPI 1.03061.05890.97781.18471.16521.55940.92120.82560.72030.7128
SGAI 1.02281.07060.92761.04970.42591.03661.45821.81880.88660.8275
LVGI 0.92270.91980.97420.86560.84580.5410.67271.12371.33291.0034
TATA -0.0533-0.1082-0.2868-0.12320.14590.017-0.0865-0.0453-0.1173-0.0536
M-score -2.79-3.00-4.08-2.70-0.21-2.35-2.97-2.78-1.90-2.90

Veeco Instruments Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.45021.69022.12971.14221.16970.55340.67880.76490.54691.5113
GMI 1.18731.0810.90560.93150.86960.87730.9240.89290.9070.9276
AQI 2.42512.1191.22731.19981.15491.31350.95151.00551.0890.8707
SGI 0.8990.96481.18421.10971.2181.37321.21421.14070.91750.7135
DEPI 0.68840.62820.72030.70340.69270.71870.71280.84060.84050.8418
SGAI 1.3871.22410.88660.93690.85610.74380.82750.83970.96541.1863
LVGI 1.01021.34311.33291.73611.70881.22051.00340.87540.72651.0796
TATA 0.0059-0.0226-0.1173-0.1804-0.1752-0.1629-0.0536-0.0245-0.0303-0.1263
M-score -1.56-1.68-1.90-3.31-3.20-3.32-2.90-2.69-3.05-3.02
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