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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.
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 -2.27.
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 * 1.0464||+||0.528 * 1.0182||+||0.404 * 0.9176||+||0.892 * 1.2035||+||0.115 * 1.0489|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0412||+||4.679 * 0.0218||-||0.327 * 1.2949|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|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.
Net Income was 22.159 + 21.929 + 20.232 + 19.036 = $83.4 Mil.
Non Operating Income was 0.469 + -0.354 + 1.137 + 0.33 = $1.6 Mil.
Cash Flow from Operations was 10.534 + 23.023 + 15.508 + 17.497 = $66.6 Mil.
|Accounts Receivable was $44.9 Mil.
Revenue was 63.753 + 60.633 + 50.808 + 51.476 = $226.7 Mil.
Gross Profit was 44.268 + 43.096 + 40.533 + 41.512 = $169.4 Mil.
Total Current Assets was $83.0 Mil.
Total Assets was $613.2 Mil.
Property, Plant and Equipment(Net PPE) was $28.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.7 Mil.
Selling, General & Admin. Expense(SGA) was $51.7 Mil.
Total Current Liabilities was $47.8 Mil.
Long-Term Debt was $136.1 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(56.503 / 272.795)||/||(44.869 / 226.67)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(53.76 / 226.67)||/||(51.464 / 272.795)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (139.254 + 34.154) / 697.4)||/||(1 - (82.995 + 28.121) / 613.228)|
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.
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))|
|=||(9.726 / (9.726 + 28.121))||/||(11.083 / (11.083 + 34.154))|
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)|
|=||(64.786 / 272.795)||/||(51.703 / 226.67)|
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)|
|=||((226.498 + 44.236) / 697.4)||/||((136.058 + 47.785) / 613.228)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(83.356 - 1.582||-||66.562)||/||697.4|
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 -2.28 suggests that the company will not be a manipulator.
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
Ebix Inc Annual Data
Ebix Inc Quarterly Data