Switch to:
GuruFocus has detected 5 Warning Signs with Illumina Inc $ILMN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Illumina Inc (NAS:ILMN)
Beneish M-Score
-3.01 (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.

Illumina Inc has a M-score of -3.01 suggests that the company is not a manipulator.

ILMN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.42   Max: 5.89
Current: -3.01

-4.42
5.89

During the past 13 years, the highest Beneish M-Score of Illumina Inc was 5.89. The lowest was -4.42. And the median was -2.56.


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 Illumina 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 * 0.8496+0.528 * 1.0326+0.404 * 0.8327+0.892 * 1.0761+0.115 * 1.5155
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.003+4.679 * -0.1016-0.327 * 0.9744
=-3.01

* 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 $368 Mil.
Revenue was 598 + 619.347 + 607.139 + 600.124 = $2,425 Mil.
Gross Profit was 368 + 419.439 + 426.15 + 423.805 = $1,637 Mil.
Total Current Assets was $2,517 Mil.
Total Assets was $4,598 Mil.
Property, Plant and Equipment(Net PPE) was $734 Mil.
Depreciation, Depletion and Amortization(DDA) was $146 Mil.
Selling, General & Admin. Expense(SGA) was $605 Mil.
Total Current Liabilities was $721 Mil.
Long-Term Debt was $1,055 Mil.
Net Income was 367 + 123.762 + 128.888 + 120.412 = $740 Mil.
Non Operating Income was 455 + -3.588 + -0.186 + -0.15 = $451 Mil.
Cash Flow from Operations was 168 + 280.153 + 150.3 + 157.785 = $756 Mil.
Accounts Receivable was $403 Mil.
Revenue was 572 + 591.548 + 550.271 + 539.378 = $2,253 Mil.
Gross Profit was 397 + 410.359 + 387.539 + 376.365 = $1,571 Mil.
Total Current Assets was $2,074 Mil.
Total Assets was $3,794 Mil.
Property, Plant and Equipment(Net PPE) was $385 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $560 Mil.
Total Current Liabilities was $481 Mil.
Long-Term Debt was $1,023 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)
=(368 / 2424.61) / (402.514 / 2253.197)
=0.15177699 / 0.17864128
=0.8496

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)
=(1571.263 / 2253.197) / (1637.394 / 2424.61)
=0.69734826 / 0.67532263
=1.0326

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 - (2517 + 734) / 4598) / (1 - (2073.798 + 385.253) / 3793.706)
=0.29295346 / 0.3518077
=0.8327

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
=2424.61 / 2253.197
=1.0761

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))
=(129.317 / (129.317 + 385.253)) / (145.915 / (145.915 + 734))
=0.2513108 / 0.16582852
=1.5155

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)
=(604.772 / 2424.61) / (560.34 / 2253.197)
=0.24943063 / 0.24868664
=1.003

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)
=((1055 + 721) / 4598) / ((1022.646 + 481.228) / 3793.706)
=0.38625489 / 0.3964129
=0.9744

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
=(740.062 - 451.076 - 756.238) / 4598
=-0.1016

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.

Illumina Inc has a M-score of -3.01 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.

Illumina Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.04611.02591.01830.77480.8981.13620.89830.92491.1150.9159
GMI 1.06190.99630.92781.03730.99190.99751.04970.92030.99891.0046
AQI 1.41890.72350.83481.05850.94321.03291.66260.89340.95410.8622
SGI 1.98711.56281.16241.35481.16931.08811.23741.30971.19251.0806
DEPI 0.71471.07691.12590.85990.75811.14250.86621.09341.10561.6337
SGAI 0.94260.93541.02490.92281.17811.01520.95080.90880.93651.0332
LVGI 5.0970.50841.05970.94191.62060.91830.88931.33020.86170.9284
TATA -0.3388-0.038-0.0707-0.0748-0.106-0.0717-0.1064-0.0359-0.0557-0.0519
M-score -4.30-2.06-2.76-2.66-3.21-2.56-2.54-2.61-2.41-2.69

Illumina Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.92490.9121.10941.21221.1151.010.90440.83340.91590.8496
GMI 0.92030.9120.91550.94820.99891.01041.01491.01841.00461.0326
AQI 0.89340.83440.80460.9490.95411.06291.06360.95710.86220.8327
SGI 1.30971.30981.28431.23281.19251.13851.11731.10751.08061.0761
DEPI 1.09341.15641.15721.07431.10561.15141.35231.61611.63371.5155
SGAI 0.90881.18871.16861.17760.93651.03421.08331.06081.03321.003
LVGI 1.33021.29330.8720.76120.86170.8140.86840.92630.92840.9744
TATA -0.0359-0.0239-0.014-0.0154-0.0557-0.0725-0.0612-0.0483-0.0519-0.1016
M-score -2.61-2.62-2.28-2.14-2.41-2.58-2.65-2.69-2.69-3.01
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK