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GuruFocus has detected 2 Warning Signs with Insight Enterprises Inc $NSIT.
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Insight Enterprises Inc (NAS:NSIT)
Beneish M-Score
-1.85 (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.

Insight Enterprises Inc has a M-score of -1.85 signals that the company is a manipulator.

NSIT' s Beneish M-Score Range Over the Past 10 Years
Min: -4.14   Max: 64.29
Current: -1.85

-4.14
64.29

During the past 13 years, the highest Beneish M-Score of Insight Enterprises Inc was 64.29. The lowest was -4.14. And the median was -2.36.


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 Insight Enterprises 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 * 1.2129+0.528 * 0.9859+0.404 * 1.4983+0.892 * 1.0886+0.115 * 0.9398
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9599+4.679 * 0.0429-0.327 * 1.1359
=-1.85

* 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 $1,388 Mil.
Revenue was 1477.543 + 1467.583 + 1392.716 + 1456.234 = $5,794 Mil.
Gross Profit was 208.227 + 190.969 + 181.808 + 209.217 = $790 Mil.
Total Current Assets was $1,960 Mil.
Total Assets was $2,391 Mil.
Property, Plant and Equipment(Net PPE) was $79 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $617 Mil.
Total Current Liabilities was $1,239 Mil.
Long-Term Debt was $361 Mil.
Net Income was 13.848 + 21.1 + 21.635 + 35.067 = $92 Mil.
Non Operating Income was -0.695 + 0.209 + -0.931 + -0.206 = $-2 Mil.
Cash Flow from Operations was -152.102 + 220.948 + -120.235 + 42.021 = $-9 Mil.
Accounts Receivable was $1,051 Mil.
Revenue was 1168.982 + 1387.185 + 1342.195 + 1424.031 = $5,322 Mil.
Gross Profit was 161.108 + 180.853 + 182.251 + 191.415 = $716 Mil.
Total Current Assets was $1,492 Mil.
Total Assets was $1,749 Mil.
Property, Plant and Equipment(Net PPE) was $86 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $590 Mil.
Total Current Liabilities was $889 Mil.
Long-Term Debt was $141 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)
=(1387.502 / 5794.076) / (1050.866 / 5322.393)
=0.23946907 / 0.19744239
=1.2129

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)
=(715.627 / 5322.393) / (790.221 / 5794.076)
=0.13445587 / 0.1363843
=0.9859

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 - (1960.47 + 79.307) / 2390.699) / (1 - (1491.828 + 85.975) / 1749.167)
=0.14678636 / 0.09796892
=1.4983

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
=5794.076 / 5322.393
=1.0886

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))
=(38.595 / (38.595 + 85.975)) / (39.003 / (39.003 + 79.307))
=0.3098258 / 0.32966782
=0.9398

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)
=(616.756 / 5794.076) / (590.229 / 5322.393)
=0.10644596 / 0.11089542
=0.9599

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)
=((360.616 + 1238.867) / 2390.699) / ((141.171 + 889.094) / 1749.167)
=0.66904407 / 0.58900322
=1.1359

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
=(91.65 - -1.623 - -9.368) / 2390.699
=0.0429

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.

Insight Enterprises Inc has a M-score of -1.85 signals that the company is likely to 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.

Insight Enterprises Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.82340.92351.170.97820.96761.13190.94531.00710.99391.0701
GMI 0.94241.00141.00051.02331.00150.9880.99921.01381.00520.9841
AQI 0.94220.58320.96750.79371.02170.80120.96060.95161.20970.8591
SGI 1.30931.00520.85731.16271.09921.00270.97041.03341.01071.0209
DEPI 0.82850.86160.9651.01580.97360.97610.93570.85010.93210.8598
SGAI 1.08921.05011.04220.88910.97571.01261.030.98831.0030.9801
LVGI 0.95521.28920.96180.98260.96730.95640.94991.02981.04411.0347
TATA -0.0128-0.2306-0.0551-0.0115-0.00810.0121-0.0018-0.0169-0.0515-0.0042
M-score -2.50-3.91-2.72-2.45-2.44-2.38-2.58-2.56-2.65-2.51

Insight Enterprises Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.00710.94111.06991.03380.99391.01091.00651.0561.07011.2129
GMI 1.01381.01921.031.02251.00520.9930.96930.97430.98410.9859
AQI 0.95160.97090.87130.91521.20971.36181.35911.28040.85911.4983
SGI 1.03341.02781.02881.03171.01071.00021.00510.9951.02091.0886
DEPI 0.85010.84380.90930.92080.93210.93060.87490.85730.85980.9398
SGAI 0.98830.98830.97980.98111.0031.02571.02411.01720.98010.9599
LVGI 1.02981.00521.10111.09711.04410.99670.99181.0381.03471.1359
TATA -0.01690.0069-0.0132-0.0064-0.0515-0.02290.00130.0283-0.00420.0429
M-score -2.56-2.50-2.53-2.51-2.65-2.45-2.35-2.23-2.51-1.85
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