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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 12 years, the highest Beneish M-Score of AthenaHealth Inc was -0.40. The lowest was -3.19. And the median was -2.64.
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 AthenaHealth 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 * 0.791||+||0.528 * 0.9952||+||0.404 * 0.8807||+||0.892 * 1.3173||+||0.115 * 0.8123|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9544||+||4.679 * -0.1569||-||0.327 * 0.9002|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $101.5 Mil.|
Revenue was 190.428 + 185.922 + 163.035 + 171.579 = $711.0 Mil.
Gross Profit was 111.085 + 111.148 + 90.887 + 108.727 = $421.8 Mil.
Total Current Assets was $229.5 Mil.
Total Assets was $891.6 Mil.
Property, Plant and Equipment(Net PPE) was $259.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $87.6 Mil.
Selling, General & Admin. Expense(SGA) was $291.0 Mil.
Total Current Liabilities was $197.0 Mil.
Long-Term Debt was $162.5 Mil.
Net Income was -1.631 + -2.162 + -8.055 + 13.145 = $1.3 Mil.
Non Operating Income was 0.026 + -0.006 + -0.171 + 0.136 = $-0.0 Mil.
Cash Flow from Operations was 40.389 + 49.686 + 14.066 + 37.105 = $141.2 Mil.
|Accounts Receivable was $97.4 Mil.
Revenue was 151.527 + 146.301 + 125.596 + 116.304 = $539.7 Mil.
Gross Profit was 88.282 + 86.911 + 72.411 + 71.096 = $318.7 Mil.
Total Current Assets was $180.6 Mil.
Total Assets was $788.2 Mil.
Property, Plant and Equipment(Net PPE) was $203.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.5 Mil.
Selling, General & Admin. Expense(SGA) was $231.5 Mil.
Total Current Liabilities was $175.5 Mil.
Long-Term Debt was $177.5 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)|
|=||(101.507 / 710.964)||/||(97.417 / 539.728)|
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)|
|=||(111.148 / 539.728)||/||(111.085 / 710.964)|
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 - (229.549 + 259.66) / 891.591)||/||(1 - (180.649 + 203.638) / 788.217)|
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))|
|=||(52.477 / (52.477 + 203.638))||/||(87.595 / (87.595 + 259.66))|
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)|
|=||(291.041 / 710.964)||/||(231.51 / 539.728)|
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)|
|=||((162.5 + 196.957) / 891.591)||/||((177.5 + 175.523) / 788.217)|
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|
|=||(1.297 - -0.015||-||141.246)||/||891.591|
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.
AthenaHealth Inc has a M-score of -3.16 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
AthenaHealth Inc Annual Data
AthenaHealth Inc Quarterly Data