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athenahealth Inc (NAS:ATHN)
Beneish M-Score
-3.07 (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.

athenahealth Inc has a M-score of -3.07 suggests that the company is not a manipulator.

ATHN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.07   Max: -0.4
Current: -3.07

-3.07
-0.4

During the past 13 years, the highest Beneish M-Score of athenahealth Inc was -0.40. The lowest was -3.07. 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 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 * 0.9907+0.528 * 0.9907+0.404 * 0.9907+0.892 * 1.2287+0.115 * 0.9562
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9679+4.679 * -0.1596-0.327 * 1.1025
=-3.07

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $148.2 Mil.
Revenue was 257.532 + 236.068 + 224.694 + 206.434 = $924.7 Mil.
Gross Profit was 160.279 + 141.218 + 134.795 + 121.877 = $558.2 Mil.
Total Current Assets was $320.3 Mil.
Total Assets was $1,118.7 Mil.
Property, Plant and Equipment(Net PPE) was $321.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $118.0 Mil.
Selling, General & Admin. Expense(SGA) was $374.5 Mil.
Total Current Liabilities was $193.7 Mil.
Long-Term Debt was $287.4 Mil.
Net Income was 7.715 + 5.795 + 9.349 + -8.832 = $14.0 Mil.
Non Operating Income was 0.023 + 7.59 + 21.081 + 0 = $28.7 Mil.
Cash Flow from Operations was 60.925 + 28.339 + 61.656 + 12.924 = $163.8 Mil.
Accounts Receivable was $121.7 Mil.
Revenue was 213.214 + 190.428 + 185.922 + 163.035 = $752.6 Mil.
Gross Profit was 136.94 + 111.085 + 111.148 + 90.887 = $450.1 Mil.
Total Current Assets was $258.6 Mil.
Total Assets was $930.6 Mil.
Property, Plant and Equipment(Net PPE) was $271.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $93.8 Mil.
Selling, General & Admin. Expense(SGA) was $314.9 Mil.
Total Current Liabilities was $205.2 Mil.
Long-Term Debt was $157.8 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)
=(148.157 / 924.728) / (121.71 / 752.599)
=0.16021684 / 0.16171959
=0.9907

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)
=(141.218 / 752.599) / (160.279 / 924.728)
=0.5980077 / 0.60360344
=0.9907

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 - (320.26 + 321.524) / 1118.662) / (1 - (258.624 + 271.552) / 930.62)
=0.4262932 / 0.43029808
=0.9907

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
=924.728 / 752.599
=1.2287

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))
=(93.806 / (93.806 + 271.552)) / (118.022 / (118.022 + 321.524))
=0.25675091 / 0.26850887
=0.9562

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)
=(374.478 / 924.728) / (314.88 / 752.599)
=0.40496016 / 0.41839014
=0.9679

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)
=((287.353 + 193.697) / 1118.662) / ((157.822 + 205.159) / 930.62)
=0.43002265 / 0.39004212
=1.1025

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
=(14.027 - 28.694 - 163.844) / 1118.662
=-0.1596

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 -3.07 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 own currency.

athenahealth Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.06391.21381.03670.84951.00770.9691.00111.10170.9907
GMI 0.95570.9680.96430.95750.97681.02691.00991.00140.9907
AQI 0.2744.16781.93150.88651.29370.71972.17230.84670.9907
SGI 1.32921.35241.38341.30241.31981.3031.40911.26491.2287
DEPI 0.96391.44270.8950.87431.08230.76171.55710.87640.9562
SGAI 0.87331.03860.97271.0481.01630.96361.09660.99870.9679
LVGI 0.16991.15061.10750.81620.95120.9132.60480.96021.1025
TATA -0.04470.0663-0.1132-0.1226-0.1209-0.1217-0.1143-0.1634-0.1596
M-score -2.36-0.40-2.32-2.95-2.62-2.90-2.65-2.98-3.07

athenahealth Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.34911.00110.67080.76860.7911.10171.08341.05021.15180.9907
GMI 1.02851.00991.00961.00360.99521.00140.98060.98210.97670.9907
AQI 2.16432.17230.76280.87740.88070.84671.01290.96680.96520.9907
SGI 1.35451.40911.40141.36021.31731.26491.25861.24211.23831.2287
DEPI 1.58691.55711.36030.67110.81230.87640.98930.99620.95930.9562
SGAI 1.09971.09660.99240.95790.95440.99871.02261.00510.98480.9679
LVGI 3.01632.60481.1870.87370.90020.96021.03761.09991.07141.1025
TATA -0.108-0.1143-0.1409-0.1541-0.1571-0.1636-0.1568-0.1648-0.148-0.1596
M-score -2.47-2.65-3.19-3.13-3.16-2.98-2.93-3.05-2.87-3.07
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