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GuruFocus has detected 2 Warning Signs with Insperity Inc $NSP.
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Insperity Inc (NYSE:NSP)
Beneish M-Score
-0.39 (As of Today)

Warning Sign:

Beneish M-Score -0.39 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Insperity Inc has a M-score of -0.39 signals that the company is a manipulator.

NSP' s Beneish M-Score Range Over the Past 10 Years
Min: -4.04   Max: 95.15
Current: -0.39

-4.04
95.15

During the past 13 years, the highest Beneish M-Score of Insperity Inc was 95.15. The lowest was -4.04. And the median was -2.65.


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 Insperity 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 * 3.1446+0.528 * 1.0208+0.404 * 1.0041+0.892 * 1.1164+0.115 * 1.3448
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9815+4.679 * -0.0131-0.327 * 0.949
=-0.39

* 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 $8 Mil.
Revenue was 882.664 + 729.069 + 702.538 + 707.332 = $3,022 Mil.
Gross Profit was 159.346 + 110.539 + 117.796 + 113.259 = $501 Mil.
Total Current Assets was $650 Mil.
Total Assets was $929 Mil.
Property, Plant and Equipment(Net PPE) was $88 Mil.
Depreciation, Depletion and Amortization(DDA) was $17 Mil.
Selling, General & Admin. Expense(SGA) was $378 Mil.
Total Current Liabilities was $591 Mil.
Long-Term Debt was $104 Mil.
Net Income was 35.628 + 9.52 + 14.065 + 9.713 = $69 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 43.661 + 97.874 + -25.867 + -34.541 = $81 Mil.
Accounts Receivable was $2 Mil.
Revenue was 802.408 + 650.011 + 626.286 + 627.838 = $2,707 Mil.
Gross Profit was 150.016 + 97.045 + 106.743 + 104.219 = $458 Mil.
Total Current Assets was $636 Mil.
Total Assets was $881 Mil.
Property, Plant and Equipment(Net PPE) was $64 Mil.
Depreciation, Depletion and Amortization(DDA) was $18 Mil.
Selling, General & Admin. Expense(SGA) was $345 Mil.
Total Current Liabilities was $590 Mil.
Long-Term Debt was $104 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)
=(8.401 / 3021.603) / (2.393 / 2706.543)
=0.00278031 / 0.00088415
=3.1446

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)
=(458.023 / 2706.543) / (500.94 / 3021.603)
=0.16922805 / 0.16578617
=1.0208

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 - (650.476 + 87.673) / 928.528) / (1 - (636.393 + 64.315) / 880.51)
=0.20503313 / 0.20420211
=1.0041

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
=3021.603 / 2706.543
=1.1164

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))
=(17.551 / (17.551 + 64.315)) / (16.627 / (16.627 + 87.673))
=0.21438692 / 0.15941515
=1.3448

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)
=(377.558 / 3021.603) / (344.577 / 2706.543)
=0.12495288 / 0.12731259
=0.9815

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)
=((104.4 + 590.947) / 928.528) / ((104.4 + 590.427) / 880.51)
=0.74887025 / 0.78911881
=0.949

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
=(68.926 - 0 - 81.127) / 928.528
=-0.0131

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.

Insperity Inc has a M-score of -0.39 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.

Insperity Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.92750.88551.02231.11430.048322.08060.03751.54190.57991.5085
GMI 1.04430.97751.14431.00350.97521.00541.01581.01781.01841.0062
AQI 1.06261.02151.0590.97171.04311.03071.07241.22181.26070.8914
SGI 1.12991.09840.95861.04031.14911.09241.04511.04511.10431.1297
DEPI 0.91751.18190.87451.03121.1680.86490.830.96890.87521.3457
SGAI 0.97891.0530.96850.970.98550.95821.02351.01390.9380.9511
LVGI 1.10221.00770.88541.06311.03811.04420.98071.09950.9921.2513
TATA -0.0483-0.11670.0273-0.0854-0.0504-0.06740-0.1435-0.0327-0.0735
M-score -2.65-3.04-2.24-2.76-3.4416.67-3.30-2.55-2.81-2.32

Insperity Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.54190.01591.79040.03060.57990.57220.52980.3161.50853.1446
GMI 1.01780.97110.96340.97561.01841.04371.04781.03831.00621.0208
AQI 1.22181.19791.17191.24821.26071.16051.03881.10840.89141.0041
SGI 1.04511.06091.08041.09941.10431.11831.12181.12271.12971.1164
DEPI 0.96890.75660.77240.79780.87521.24141.3011.3691.34571.3448
SGAI 1.01391.00860.98960.95790.9380.91120.92170.94010.95110.9815
LVGI 1.09951.06481.0981.08150.9921.24751.24181.17531.25130.949
TATA -0.1435-0.0746-0.0823-0.0971-0.0327-0.1589-0.1613-0.0789-0.0735-0.0131
M-score -2.55-3.67-2.07-3.69-2.81-3.46-3.55-3.31-2.32-0.39
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