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athenahealth Inc (NAS:ATHN)
Beneish M-Score
-3.02 (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 -3.02 suggests that the company is not a manipulator.

ATHN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.19   Max: -0.4
Current: -3.02

-3.19
-0.4

During the past 13 years, the highest Beneish M-Score of athenahealth Inc was -0.40. The lowest was -3.19. And the median was -2.67.


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 * 1.0138+0.528 * 1.0031+0.404 * 0.9156+0.892 * 1.2242+0.115 * 0.9311
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9437+4.679 * -0.1529-0.327 * 1.0089
=-3.02

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $147.3 Mil.
Revenue was 256.149 + 257.532 + 236.068 + 224.694 = $974.4 Mil.
Gross Profit was 150.76 + 160.279 + 141.218 + 134.795 = $587.1 Mil.
Total Current Assets was $283.1 Mil.
Total Assets was $1,085.3 Mil.
Property, Plant and Equipment(Net PPE) was $323.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $124.5 Mil.
Selling, General & Admin. Expense(SGA) was $383.4 Mil.
Total Current Liabilities was $161.3 Mil.
Long-Term Debt was $283.7 Mil.
Net Income was -0.833 + 7.715 + 5.795 + 9.349 = $22.0 Mil.
Non Operating Income was 0.042 + 0.023 + 7.59 + 21.081 = $28.7 Mil.
Cash Flow from Operations was 8.305 + 60.925 + 28.339 + 61.656 = $159.2 Mil.
Accounts Receivable was $118.7 Mil.
Revenue was 206.434 + 213.214 + 190.428 + 185.922 = $796.0 Mil.
Gross Profit was 121.877 + 136.94 + 111.085 + 111.148 = $481.1 Mil.
Total Current Assets was $219.0 Mil.
Total Assets was $968.9 Mil.
Property, Plant and Equipment(Net PPE) was $282.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $98.9 Mil.
Selling, General & Admin. Expense(SGA) was $331.9 Mil.
Total Current Liabilities was $128.8 Mil.
Long-Term Debt was $265.0 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)
=(147.254 / 974.443) / (118.656 / 795.998)
=0.15111607 / 0.1490657
=1.0138

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)
=(160.279 / 795.998) / (150.76 / 974.443)
=0.60433569 / 0.60244878
=1.0031

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 - (283.128 + 323.094) / 1085.312) / (1 - (218.954 + 282.837) / 968.947)
=0.44143067 / 0.48212751
=0.9156

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
=974.443 / 795.998
=1.2242

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))
=(98.888 / (98.888 + 282.837)) / (124.536 / (124.536 + 323.094))
=0.2590556 / 0.27821192
=0.9311

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)
=(383.416 / 974.443) / (331.873 / 795.998)
=0.39347196 / 0.41692693
=0.9437

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)
=((283.721 + 161.322) / 1085.312) / ((265 + 128.806) / 968.947)
=0.41005996 / 0.40642677
=1.0089

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
=(22.026 - 28.736 - 159.225) / 1085.312
=-0.1529

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 -3.02 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 1.06391.18541.06160.84951.00770.9691.00111.10170.9907
GMI 0.95570.9370.99620.95750.97681.02691.00991.00140.9907
AQI 0.2744.16781.93150.88651.29370.71972.17230.84670.9907
SGI 1.32921.38481.35091.30241.31981.3031.40911.26491.2287
DEPI 0.96391.44270.8950.87431.02150.8071.55710.87640.9562
SGAI 0.87331.01430.99611.0481.01630.96361.09660.99870.9679
LVGI 0.16991.15061.10750.81620.95120.9132.60480.96021.1025
TATA -0.04470.0502-0.1132-0.1224-0.1198-0.1202-0.1143-0.1634-0.1596
M-score -2.36-0.49-2.31-2.95-2.63-2.89-2.65-2.98-3.07

athenahealth Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.00110.67080.76860.7911.10171.08341.05021.15180.99071.0138
GMI 1.00991.00961.00360.99521.00140.98060.98210.97670.99071.0031
AQI 2.17230.76280.87740.88070.84671.01290.96680.96520.99070.9156
SGI 1.40911.40141.36021.31731.26491.25861.24211.23831.22871.2242
DEPI 1.55711.36030.67110.81230.87640.98930.99620.95930.95620.9311
SGAI 1.09660.99240.95790.95440.99871.02261.00510.98480.96790.9437
LVGI 2.60481.1870.87370.90020.96021.03761.09991.07141.10251.0089
TATA -0.1143-0.1409-0.1541-0.1571-0.1636-0.1568-0.1649-0.1481-0.1596-0.1529
M-score -2.65-3.19-3.13-3.16-2.98-2.93-3.05-2.87-3.07-3.02
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