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GuruFocus has detected 3 Warning Signs with BofI Holding Inc $BOFI.
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BofI Holding Inc (NAS:BOFI)
Beneish M-Score
-2.64 (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.

BofI Holding Inc has a M-score of -2.64 suggests that the company is not a manipulator.

BOFI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.49   Max: -0.47
Current: -2.64

-3.49
-0.47

During the past 13 years, the highest Beneish M-Score of BofI Holding Inc was -0.47. The lowest was -3.49. And the median was -2.16.


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 BofI Holding 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 * 0.7267+0.528 * 1+0.404 * 0.9999+0.892 * 1.224+0.115 * 0.9187
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1707+4.679 * -0.0166-0.327 * 0.9838
=-2.64

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $21.3 Mil.
Revenue was 111.727 + 93.061 + 84.512 + 86.17 = $375.5 Mil.
Gross Profit was 111.727 + 93.061 + 84.512 + 86.17 = $375.5 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $8,700.0 Mil.
Property, Plant and Equipment(Net PPE) was $15.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.8 Mil.
Selling, General & Admin. Expense(SGA) was $117.4 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,015.5 Mil.
Net Income was 40.994 + 32.3 + 28.897 + 29.727 = $131.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 85.746 + 17.691 + 65.459 + 107.471 = $276.4 Mil.
Accounts Receivable was $23.9 Mil.
Revenue was 92.873 + 79.391 + 68.917 + 65.572 = $306.8 Mil.
Gross Profit was 92.873 + 79.391 + 68.917 + 65.572 = $306.8 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $7,705.6 Mil.
Property, Plant and Equipment(Net PPE) was $13.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.2 Mil.
Selling, General & Admin. Expense(SGA) was $81.9 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $914.2 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)
=(21.271 / 375.47) / (23.913 / 306.753)
=0.05665166 / 0.07795523
=0.7267

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)
=(306.753 / 306.753) / (375.47 / 375.47)
=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 - (0 + 15.931) / 8700.031) / (1 - (0 + 13.056) / 7705.622)
=0.99816886 / 0.99830565
=0.9999

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
=375.47 / 306.753
=1.224

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))
=(4.238 / (4.238 + 13.056)) / (5.795 / (5.795 + 15.931))
=0.24505609 / 0.26673111
=0.9187

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)
=(117.407 / 375.47) / (81.931 / 306.753)
=0.31269342 / 0.26709111
=1.1707

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)
=((1015.45 + 0) / 8700.031) / ((914.155 + 0) / 7705.622)
=0.11671797 / 0.11863481
=0.9838

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
=(131.918 - 0 - 276.367) / 8700.031
=-0.0166

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.

BofI Holding Inc has a M-score of -2.64 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.

BofI Holding Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.6480.59190.66840.43241.15640.8330.91631.15111.01630.9064
GMI 1111111111
AQI 10.999910.99990.99880.99981.00090.99951.00010.9996
SGI 1.06471.61281.52961.98621.12841.43691.35351.23361.43861.4261
DEPI 1.01213.57220.89591.02621.67520.71280.59351.29141.08371.0847
SGAI 1.15291.34740.86610.60771.52481.00441.08890.880.94320.957
LVGI 0.75031.37890.97160.40271.21721.11051.07671.07860.62630.7933
TATA 0.0016-0.00430.01330.02540.00850.03590.00790.0079-0.0057-0.012
M-score -1.76-2.22-2.23-1.74-2.27-2.15-2.29-2.07-1.96-2.16

BofI Holding Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.11551.11341.01631.02310.94660.90280.90640.65310.86480.7267
GMI 1111111111
AQI 1.00031.00031.00011.00020.99990.99980.99960.99950.99970.9999
SGI 1.34181.39271.43861.42241.42871.46641.42611.3811.30671.224
DEPI 1.01061.07381.08370.93561.05991.12011.08471.15910.99330.9187
SGAI 0.85770.90620.94320.86410.90210.90170.9571.18691.17271.1707
LVGI 0.63170.6860.62630.58950.88141.11510.79330.68630.7710.9838
TATA 0.00410.0057-0.0057-0.0013-0.0036-0.0013-0.012-0.0143-0.0119-0.0166
M-score -1.90-1.87-1.96-1.94-2.10-2.17-2.16-2.44-2.34-2.64
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