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GuruFocus has detected 4 Warning Signs with Ebix Inc $EBIX.
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Ebix Inc (NAS:EBIX)
Beneish M-Score
-2.32 (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.

Ebix Inc has a M-score of -2.32 suggests that the company is not a manipulator.

EBIX' s Beneish M-Score Range Over the Past 10 Years
Min: -7.92   Max: 2.44
Current: -2.32

-7.92
2.44

During the past 13 years, the highest Beneish M-Score of Ebix Inc was 2.44. The lowest was -7.92. And the median was -2.28.


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 Ebix 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 * 1.0784+0.528 * 1.0429+0.404 * 0.9132+0.892 * 1.1229+0.115 * 1.0323
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9658+4.679 * 0.0061-0.327 * 1.1559
=-2.32

* 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 $68.4 Mil.
Revenue was 79.103 + 80.046 + 74.608 + 72.574 = $306.3 Mil.
Gross Profit was 53.916 + 57.524 + 52.183 + 51.995 = $215.6 Mil.
Total Current Assets was $217.0 Mil.
Total Assets was $815.2 Mil.
Property, Plant and Equipment(Net PPE) was $38.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.1 Mil.
Selling, General & Admin. Expense(SGA) was $70.3 Mil.
Total Current Liabilities was $69.1 Mil.
Long-Term Debt was $296.7 Mil.
Net Income was 26.427 + 24.629 + 24.067 + 22.992 = $98.1 Mil.
Non Operating Income was 3.496 + -0.839 + 1.74 + -0.195 = $4.2 Mil.
Cash Flow from Operations was 15.701 + 30.698 + 22.074 + 20.442 = $88.9 Mil.
Accounts Receivable was $56.5 Mil.
Revenue was 71.066 + 70.204 + 66.813 + 64.712 = $272.8 Mil.
Gross Profit was 51.464 + 53.76 + 49.004 + 46.013 = $200.2 Mil.
Total Current Assets was $139.3 Mil.
Total Assets was $697.4 Mil.
Property, Plant and Equipment(Net PPE) was $34.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.1 Mil.
Selling, General & Admin. Expense(SGA) was $64.8 Mil.
Total Current Liabilities was $44.2 Mil.
Long-Term Debt was $226.5 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)
=(68.424 / 306.331) / (56.503 / 272.795)
=0.22336623 / 0.20712623
=1.0784

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)
=(200.241 / 272.795) / (215.618 / 306.331)
=0.73403471 / 0.70387261
=1.0429

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 - (217.024 + 38.823) / 815.19) / (1 - (139.254 + 34.154) / 697.4)
=0.68615047 / 0.75135073
=0.9132

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
=306.331 / 272.795
=1.1229

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))
=(11.083 / (11.083 + 34.154)) / (12.081 / (12.081 + 38.823))
=0.24499856 / 0.23732909
=1.0323

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)
=(70.263 / 306.331) / (64.786 / 272.795)
=0.22936954 / 0.23748969
=0.9658

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)
=((296.742 + 69.063) / 815.19) / ((226.498 + 44.236) / 697.4)
=0.44873588 / 0.38820476
=1.1559

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
=(98.115 - 4.202 - 88.915) / 815.19
=0.0061

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.

Ebix Inc has a M-score of -2.32 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.

Ebix Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.75440.88231.28990.84140.93581.01531.02021.00480.92651.1832
GMI 0.95661.02731.03491.01080.96860.99071.0081.03011.07121.0175
AQI 0.63841.87961.00010.97641.06390.9990.96861.0050.97010.8919
SGI 1.46451.74491.30681.35321.27821.17991.02681.04691.23871.1236
DEPI 1.03390.93471.39550.76720.94890.96580.87751.9241.18550.9807
SGAI 0.9050.85880.88551.01981.02581.06711.01420.92581.00270.9771
LVGI 0.9621.15070.590.73341.03261.11470.82391.49681.26741.1406
TATA -0.0189-0.00070.0133-0.001-0.0102-0.00740.01170.00730.04270.0111
M-score -2.52-1.59-1.66-2.26-2.35-2.40-2.35-2.43-2.18-2.23

Ebix Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.00480.95460.99350.98270.92651.04640.95621.14351.18321.0784
GMI 1.03011.07381.11041.12921.07121.01820.98660.98171.01751.0429
AQI 1.0051.0320.99911.01460.97010.91760.91650.88120.89190.9132
SGI 1.04691.11361.17591.25121.23871.20351.16991.12721.12361.1229
DEPI 1.9242.14511.38091.32581.18551.04890.93810.94350.98071.0323
SGAI 0.92580.90.82260.91571.00271.04121.08221.01180.97710.9658
LVGI 1.49681.67342.23722.05741.26741.29491.29631.13351.14061.1559
TATA 0.00730.0410.04670.04020.04270.02180.02370.01760.01110.0061
M-score -2.43-2.25-2.38-2.30-2.18-2.28-2.42-2.26-2.23-2.32
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